Activity in unsecured money market picked up in second quarter ecb survey

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FRANKFURT Euro zone banks grew more confident in the second quarter about borrowing and lending to each other in the unsecured money market, which was shunned during the crisis, a survey by the European Central Bank showed on Friday. The ECB's Euro Money Market survey showed that cash borrowing of participating banks in the unsecured market increased by 54 percent to 2.56 trillion euros in the second quarter compared with the same period last year. Their lending increased by 24 percent to 2.02 trillion euros.

"The improvement is especially noticeable in the unsecured markets. Activity in secured markets, the largest money market segment, has increased as well," the ECB said in a statement. Since the financial crisis started, banks have trusted each other less and moved towards requiring collateral in order to lend to each other. This dynamic seems to change now.

The results of this year's survey were derived from a constant panel of 101 banks.

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