The European Central Bank said overnight deposits from financialinstitutions dropped by more than half to the lowest level inalmost seven months after policy makers stopped paying interest forthe funds.
Banks in the 17-nation euro region parked 324.9 billion euros($397.2 billion) at the ECB yesterday, down from 808.5 billioneuros the previous day, the Frankfurt-based institution said.That's the least since Dec. 21.
Financial institutions are no longer remunerated for the moneythey deposit at the ECB overnight after last week's interest-ratecuts took effect yesterday. Policy makers reduced the mainrefinancing rate on July 5 to a record low of 0.75 percent and cutthe deposit rate to zero to stimulate credit supply andlending.
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