Emergency overnight borrowing from the European Central Bank surged, figures today showed, as banks waited for an injection of ECB six-month funds and amid fears about the health of Italian and French banks.

Banks took over €4 billion of overnight funds from the ECB, the highest since mid-May. Banks have to pay 2.25 per cent for the money as opposed to 1.5 per cent for regular ECB funding.

Money markets remain in a fragile state following the recent intensification of the euro zone debt crisis, but money market traders put the spike down to a timing issue as banks waited for their six-month ECB funds to arrive, rather than any new wave of tensions following a sharp sell-off of French bank stocks.

"The one-week and the one-month came off (had to be paid back) yesterday but the six month doesn't start till today so it is likely that people have gone to the overnight window to tide them over," said one European money market trader.

"I don't think this is anything to talk about at the moment but if the (overnight borrowing) numbers are high tomorrow, then there might be."

The recent deterioration in money markets prompted the ECB to reintroduce 6-month funding last week as well as extend its crisis tactic of lending banks as much money as they ask for.

French and Italian bank stocks sank yesterday, with shares of Societe Generale down as much as 23 per cent at one point amid a whirlwind of rumours questioning its future.

Reuters