EU banks’ reliance on ECB loans has grown in Covid’s wake

Central bank funding accounted for 14.5% of Greek banks’ liabilities in September

European Union lenders have become increasingly dependent on their central banks’ ultra-cheap liquidity lines to fund themselves – a side-effect of the bloc’s response to the coronavirus crisis.

Across 23 EU countries included in a data series put together by the European Systemic Risk Board (ESRB), 5.3% of commercial banks’ liabilities were owed to central banks as of September 2020, up from 1.8% a year earlier.

The shift was most pronounced among those countries that had been hardest hit by