Euro zone banks cut long-term borrowing from ECB

FRANKFURT (Reuters) - Euro zone banks are reducing the amount of long-term borrowing they take from the European Central Bank, the latest auction data showed on Thursday, in a sign the ECB's easy-money taps were starting to lose appeal among cash-replete lenders.

Banks took 97.7 billion euro at the ECB's latest Targeted Longer-Term Refinancing Operation, which is part of its stimulus efforts and lets them borrow at a zero interest rate or even get a 0.5% bonus if they pass on the cash to households and companies.

This meant they were not fully replacing the 146.8 billion euro worth of loans they are set to repay from the ECB's previous TLTRO, which offered slightly less generous term.

The low take-up suggested lenders may be set to reduce the amount of credit they extend to a sluggish euro zone economy or that their funding needs had decreased at a time of record excess cash in the banking system.

(This story fixes day of the weak in the first paragraph)

(Reporting By Francesco Canepa)

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