ECB Begins Great Cash Mop-Up as Banks Repay 296 Billion Euros of Loans
FRANKFURT—Eurozone banks are set to repay nearly 300 billion euros ($310 billion) in loans to the European Central Bank next week, the ECB said on Friday, the biggest cash withdrawal from the eurozone’s financial system in the euro’s 22-year history.
The move is part of ECB efforts to fight record-high inflation in the eurozone by raising the cost of credit and it is its first step towards mopping up even more liquidity next year by trimming its multi-trillion-euro bond portfolio.
The eurozone’s central bank said lenders would repay 296 billion euros worth of the 2.1-trillion-euros, multi-year credit they have taken under its Targeted Longer-Term Refinancing Operations (TLTRO) when they get their first chance to do so on Nov. 23….