Euro zone banks repay 147 billion euros in ECB loans before new auction

FRANKFURT (Reuters) - Euro zone banks are set to repay 146.8 billion euro worth of multi-year loans to the European Central Bank ahead of schedule, the ECB said on Friday, in a move likely designed to make room for new and cheaper credit.

The old loans, part of the ECB's second Targeted Long-Term Refinancing Operation (TLTRO), will be repaid on Dec. 18, when the ECB holds a quarterly auction on even more generous terms as part of its effort to boost the euro zone's economy.

The new three-year loans will be offered at a zero interest rate and borrowers could even be paid if they meet certain lending targets.

(Reporting By Francesco Canepa; Editing by Jon Boyle)