Eurosystem gross lending to banks in euros rose by a further €23.4 billion last week, the largest weekly increase since March, consistent with continued deposit flight from the periphery, especially Greece and Spain – see last week’s post.
A further big rise is likely this week, since €167.3 billion was allotted in today’s weekly refinancing operation versus a maturing €131.7 billion.
Last week’s lending increase was reflected in a €16.8 billion rise in bank reserves (i.e. balances in current accounts and the deposit facility). With reserves also moving higher recently in the US, Japan and Switzerland, the global measure (i.e. G4 plus Switzerland) monitored here has retraced most of its April / May fall – see chart. (See Friday’s post for more on the US reserves rise.)