Euro zone banks have plenty of collateral: ECB's Constancio
FRANKFURT (Reuters) - There is no shortage of ECB-eligible collateral in any euro zone country meaning that banks could easily increase their use of its funding if they so wished, ECB Vice-President, Vitor Constancio, said on Wednesday.
Money market rates and the euro have both risen in recent weeks as the amount of spare ECB cash that has long kept borrowing costs pinned at record lows has continued to dwindle.
"I can tell you, there is eligible collateral in all countries, in all banking sectors right now that they could use to come to us and get very cheap funding," Constancio said at an event at the Goethe University Frankfurt.
He added that it was very difficult for the ECB to influence how banks used the cash, but said he hoped lending to the economy would pick-up once the recovery gathered momentum.
"If indeed the recovery consolidates, then 2015 can be a good year where the increase in demand and the repair in economic growth will find banks that are ready to lend, and that can create a virtuous circle," Constancio said.
On the overnight deal sketched out by euro zone finance ministers regarding a joint bank resolution mechanism, Constancio said the ECB did not have enough information to comment.
(Reporting by Sakari Suoninen)
