Banks in the euro zone want to repay several hundred billion euros in multi-year loans granted by the ECB early.
The European Central Bank (ECB) announced on Friday that the financial institutions wanted to return 447.49 billion euros early in the third series of targeted loan injections, known in the art as "TLTRO III".
In November they had already repaid 296.29 billion euros early.
With the long-term lending transactions, which are very lucrative for the institutes, the euro watchdogs wanted to ensure that the flow of credit to the economy does not ebb during the Corona crisis and that banks have sufficient liquidity.
Early repayment is voluntary.
However, the ECB had recently given institutions incentives to part with these loans.
Because at its most recent interest rate meeting in October, it decided to subsequently adjust the very favorable conditions for long-term loans.
This is intended to reduce excess liquidity in the financial system.
With this step, the currency watchdogs also want to help tighten financing conditions in line with their interest rate hikes.
According to the ECB, the banks in the euro area will still be sitting on TLTRO funds with a volume of around 1.3 trillion euros after December 21 in the course of this repeated repayment.
At the beginning of November it was around 2.1 trillion euros - that's a decrease of 38 percent.
According to ECB Executive Board member Isabel Schnabel, this is helping to reduce the central bank's balance sheet.
This has swelled to around EUR 8.5 trillion as a result of the ECB's massive bond purchases over the years.
ECB President Christine Lagarde has already promised that the central bank will set the course for the balance sheet reduction at its interest rate meeting next week.
The ECB is then expected to announce plans to reduce its bond holdings.