Banks would return around EUR5.199 billion of crisis loans to the European Central Bank next week. The early repayment would drain more liquidity out of the European banking system than expected, said ECB last Friday.

The early repayment of the ECB crisis funds would reduce the level of banks' current excess liquidity of EUR207 billion. The excess liquidity levels of banks are cash that are beyond what lenders need to cover their daily operations. According to a Reuters poll of euro money market traders, banks were projected to return around EUR2.0 billion to re[ay loans next week.

Short-term money market rates had been rising closer to the main refinancing rate of the ECB that is currently at 0.5%. This was according to a Reuters report. The ECB had been carefully monitoring the development after bank to bank borrowing costs had increased. This could undermine the fragile recovery of the Euro Zone, said a Reuters report.