Banks' use of overnight ECB deposits up

FRANKFURT
Banks' use of the European Central Bank's overnight deposit facility rose Wednesday while current account levels fell from the previous day                               
Banks deposited 335.51 billion euros ($416.28 billion) with the ECB Wednesday, up from Tuesday's EUR326.51 billion                               
Overnight deposits at the ECB have ballooned since the ECB flooded the markets with over EUR1 trillion in cheap, three-year loans late last year and earlier this year
But deposits fell sharply after the ECB cut its deposit rate to 0% in July                               
Banks kept EUR533.83 billion in their current accounts Wednesday, down from EUR542.84
billion Tuesday
Banks normally keep just over EUR100 billion in reserves on their current account, where they accumulate no interest income
But with the ECB's deposit rate now at 0%, it makes no difference whether banks keep their excess funds in the overnight deposit facility--where they are tied up for a day--or in the current account, where they are available intra-day                               
Meanwhile, banks borrowed EUR864 million from the ECB Wednesday, down from EUR1.17 billion Tuesday, data released by the central bank Thursday showed                               
The ECB pays a 0% interest rate on the overnight deposits while it charges a punitive 1.50% interest rate on the emergency borrowing, compared with its benchmark one-week lending rate of 0.75%