French banks to begin repaying ECB loans
BNP Paribas and Société Générale may begin repaying three-year loans from the European Central Bank within weeks after access to funding markets improved, two people with knowledge of the matter said.
The banks, France’s largest by market value, are considering starting to reimburse the funds gradually as early as January 30th, when the ECB begins accepting repayments for its long-term refinancing operation. European banks borrowed about €1 trillion during two three-year loan allotments in December 2011 and February 2012 as the ECB sought to prevent the euro area’s sovereign-debt crisis from spawning a credit crunch. Funding conditions have improved, reducing the extra yield investors demand to hold European financial company bonds compared with German government debt to 2008 levels. – (Bloomberg)