Reuters: The European Central Bank failed to attract the 73.5 billion euros from banks on Tuesday needed to offset its seven-month run of euro zone government bond purchases, instead managing to draw just over 60 billion.The pace of the ECB’s government bond purchases picked up last week as the bank spent 1.121 billion euros reflecting the bank’s ongoing attempt to calm euro zone debt markets.
The central bank takes seven-day deposits from commercial banks on a weekly basis to offset its spending, but the failure to fully sterilize the purchases is likely to reflect the fact banks are keeping hold of their funding around the traditionally tense year-end period.
“It has happened before but I wouldn’t make too much of a big deal out of it,” said ING economist Martin Van Vliet. “The end of year is typically a quiet period and banks books are closed so it shouldn’t be seen as a sign that tensions are returning to interbank markets.” Read more…..
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