New figures show that banks' deposits with the European Central Bank have hit yet another new record, just days after the ECB pumped more than half a trillion euro into banks to unblock credit markets.
Banks put €820.8 billion on deposit for 24 hours at the ECB overnight on Friday, beating the previous record set the day before of €776.9 billion.
Rising levels of deposits at the central bank are seen by some as a possible sign of market tensions since the money deposited earns interest of 0.25%, much less than the rate available on the interbank market.
This means that heavy use of the facility suggests banks would rather park the money at low interest with the ECB rather than lending it to each other.
But the massive amount currently held on deposit is not seen by analysts as surprising in the wake of last week's long-term refinancing operation (or LTRO) in which the ECB pumped a record €529.5 billion into euro area banks to avert a credit crunch.
Greek bank deposits have dropped €70 billion
Greece's finance minister says bank deposits in the country have fallen by €70 billion since the start of the crisis in 2009.
Evangelos Venizelos said in an interview with Antenna Television today that only €16 billion of the total amount of funds withdrawn from Greek banks was sent abroad, mostly to the UK.
He stressed the importance of restoring confidence in order to encourage the return of funds to the banks.
Greece will this week learn what percentage of its private creditors will participate in a major debt swap deal. The bond swap is an integral part of Greece's second bail-out, without which the country could default.
