Excess liquidity in the eurozone approaches 2 trillion euros, with the use of overnight deposit facilities reaching record highs
智通财经2026/08/11 09:36- According to daily liquidity data released by the European Central Bank on Tuesday, the amount of funds deposited by financial institutions via the overnight deposit facility has reached nearly 2 trillion euros, continuing to rise from the previous trading day and setting new highs.
- Meanwhile, the usage of the overnight loan facility was zero during the same period, marking consecutive days with no financial institutions borrowing through this channel. This reflects extremely abundant overall liquidity in the eurozone banking system, with no marginal funding needs for individual institutions.
- The continued expansion in the use of the deposit facility indicates that commercial banks prefer to place surplus funds overnight at the central bank rather than allocate them to credit or higher-risk assets. This, to a certain extent, reveals a cautious approach toward lending to the real economy.
- During the same period, the holding size of current accounts was about 327.4 billion euros, slightly down from the previous day but still at a historically high level, indicating that bank reserves remain ample.
- Such a massive surplus liquidity presents a real consideration for the European Central Bank’s future balance sheet operations or rate path. How to gradually absorb this excess liquidity without triggering market volatility will be a key issue in the normalization process of monetary policy going forward.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Strong demand for $39 billions 10-year US Treasury auction, winning yield at 5.3%
After a strong demand from investors for the sale of $39 billion 10-year U.S. Treasury bonds, U.S. Treasury yields further retreated from their intraday highs. The 10-year U.S. Treasury bonds were awarded at a yield of 5.3%, lower than pre-auction expectations among traders. Bank of Montreal stated that the allocation ratio for bond dealers—who are required to participate in Treasury auctions—was unusually low this time, indicating very strong demand from other types of investors. U.S. Treasury yields had risen sharply before the U.S. market opened, but as oil prices fell, most of the gains were erased.
The EU is reportedly required to await IEA confirmation that energy security will not be compromised before releasing reserves.
According to Politico: Three diplomats familiar with the matter stated that the European Union will only proceed with further releases of oil and diesel reserves if the International Energy Agency (IEA) explicitly confirms that such actions will not compromise the EU’s energy security.
The yield on the 10-year U.S. Treasury auction reaches 5.3%, hitting its highest level since November 2000.
The yield on the 10-year U.S. Treasury bond auction is 5.3%, reaching its highest level since November 2000.
Crypto prices
More
