Mon Jan 30, 2012 11:15pm EST
(Reuters) – Some of the euro zone’s biggest banks have told the Financial Times that they are preparing to tap the European Central Bank’s emergency funding scheme for up to twice as much as the ECB supplied in its December auction.
The banks told the FT that they may double or triple their request for funds in the ECB’s three-year money auction on Feb 29, a further sign of the liquidity squeeze faced by the banks, the paper said.
Three bank chief executives, all of whom asked to remain anonymous, told the paper that they were planning to increase their participation two-fold or three-fold. The FT did not name any banks.
In the first of two planned offerings of unlimited cheap money intended to keep credit flowing among banks hammered by the euro zone’s sovereign debt crisis, financial institutions took 489 billion euros on December 22 from the ECB.
The European Central Bank will allot 325 billion euros ($427 billion) in its second three-year refinancing tender due in late February so long as money markets remain stressed, a Reuters poll of traders showed.
(Reporting by Sakthi Prasad; Editing by Muralikumar Anantharaman)
Jacqueline Tongko 