Wednesday, March 7, 2012

Lloyds considers borrowing money from ECB's emergency fund

Lloyds Banking Group has become the first British bank to confirm it is looking at borrowing money from an emergency facility put in place by the European Central Bank to prevent a fresh banking crisis.

Leeds Lloyds TSB bank statue of horse

Antonio Horta-Osorio, chief executive of the taxpayer-backed lender, said Lloyds was considering borrowing billions of euros from the ECB to finance its remaining eurozone assets.
The ECB loaned €489bn (£414bn) in three-year money to eurozone banks in December and City analysts expect a similar amount to be borrowed at the end of this month when lenders are offered a second opportunity to access the central bank's borrowing window.
"It makes sense for our euro assets," said Mr Horta-Osorio, adding that the bank would make a decision on Monday on whether it would take a loan from the ECB when the second tranche of long-term financing operations (LTRO) are offered.
Lloyds is the only UK bank to have given a clear indication it could borrow from LTRO programme. RBS on Thursday declined to comment, while Barclays earlier this month said it had studied the scheme, but decided against using it.
The admission came as Lloyds reported a £3.5bn loss for 2011, largely as a result of a £3.2bn charge it took in the first half of last year against the cost of compensating customers mis-sold payment protection insurance (PPI).

No comments:

Post a Comment