Eurozone banks shun Mario Draghi's rescue measure

The operation is the first since new TLTROs were announced by Mario Draghi, president of the ECB, in June.

September's is the first operation of eight to be conducted up until June 2016.

The euro area saw inflation of just 0.4pc in the year to August, Eurostat confirmed yesterday. Price growth has now been sub-1pc for 11 consecutive months, territory described by Mr Draghi as a "danger zone".

A low uptake could mean that "the ECB will have to implement a full-blown quantitative easing programme to eradicate the risk of deflation", said Jennifer McKeown, of Capital Economics.

The ECB is now trying to reverse the shrinkage of its balance sheet, to prop up the ailing economy. The central bank’s balance sheet is €1 trillion (£790bn) smaller than in 2012.

Achieving that goal will be difficult for the ECB. “The measures announced so far are unlikely to be enough”, said BNP Paribas analysts.

They cited "anecdotal evidence suggesting a lack of appetite in core countries' banks to take the funding" and "A preference of banks in other countries to wait and see".

Pier Carlo Padoan, Italy’s finance minister, said that a take-up of €37bn (£29bn) this September was a “realistic estimate”, while Luis de Guindos, Mr Padoan’s Spanish counterpart, said that he expected demand of €30bn (£24bn) from his country’s banks.

Another ECB operation is due this December. Analysts polled before the release of Thursday’s data expected to see total take-up of €310bn (£250bn) across both operations.

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