The reliance of eurozone banks on the European Central Bank was demonstrated on Monday when Portugal revealed that its domestic banks were tapping the central bank for record amounts of funding.
The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3bn in March – up from €47.5bn in February and greater than the previous record level of €49.1bn in August 2010.
Bailed out by the EU and International Monetary Fund in April 2011 for €78bn, Portugal has €12bn earmarked for bolstering its banks’ capital positions if necessary in the months ahead.
The plight of Portugal’s banks was revealed following the cash injection by the ECB in February when the central bank lent €529bn to 800 banks across the eurozone through its long-term refinancing operation (LTRO).
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12:11 pm EDT, April 10th, 2012 — Debt crisis: live