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Euro zone banks rushing to cash in on ECB's tiered rate - Coeure

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By Reuters
Euro zone banks rushing to cash in on ECB's tiered rate - Coeure
FILE PHOTO: Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach   -   Copyright  Kai Pfaffenbach(Reuters)

FRANKFURT (Reuters) – Bank in the euro zone are taking advantage of the European Central Bank’s multi-tier deposit and excess liquidity is already being traded across borders, ECB board member Benoit Coeure said on Tuesday.

“On the first day of operation of the two-tier system we observed a considerable redistribution of excess liquidity, often away from liquidity-flush countries such as Belgium, Germany and the Netherlands and towards countries with unused allowances, such as Italy,” Coeure said in a speech.

Coeure added that about one-third of the more than 1 trillion euros worth of excess liquidly needs to be traded across banks so lenders enjoy the full benefit of the scheme and around 30 billion euros would need to be traded across borders.

(Reporting by Balazs Koranyi; Editing by Andrew Heavens)