The European Central Bank's 489 billion euro injection of ultra-long-term funds has seen the amount of excess liquidity in the banking system balloon to record levels and is putting heavy downward pressure on the rates banks charge each other in open markets. With banks awash with long-term funds, they took 116 billion euros in one-week funds at an ECB refinancing operation on Tuesday, 16 billion less than the previous week and slightly under than the 120 billion forecast in a Reuters poll. Three-month Euribor rates, traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, fell on Thursday to 1.108 percent from 1.115 percent, hitting the lowest level since early March of last year. Rates in other maturities also dropped. Six-month rates fell to 1.401 percent from 1.409 percent, while 12-month rates dropped to 1.737 percent from 1.745 percent. One-week rates - most heavily influenced by excess liquidity, now at 486 billion euros according to Reuters calculations - fell to 0.391 percent from 0.396 percent. Overnight rates also inched down to 0.363 percent from 0.380 percent the previous day. While it is still not clear whether the money from December's 3-year ECB loan operation is filtering through to companies and consumers, ECB President Mario Draghi said on Friday the move had avoided "a major, major credit crunch". Data showed on Friday that before the ECB 3-year loans were taken, lending to euro zone companies fell at the fastest pace on record in December. On Wednesday the ECB survey of banks showed a major toughening of banks' lending rules was expected in the coming months while demand for loans is expected to plunge. The ECB will offer another round of 3-year loans on Feb. 29. Draghi and other policymakers have said they again expect "substantial demand" meaning market rates are expected to come under renewed downward pressure in the coming months. Some money-market experts also believe the bank may hold at least one more 3-year operation after that. Interbank money markets, often the source of lending to the wider economy, remain dysfunctional as a result of the euro zone debt crisis. While short-term lending has improved in recent weeks, traders say banks remain reluctant to lend to peers for longer than a month. With high amounts of excess liquidity in the system, banks are currently depositing much of the extra cash back at the ECB. Overnight deposits at the ECB hit a record high of 528 billion euros at the peak of the ECB's last reserves period and currently stand at a still-hefty 486 billion euros. Short-term market rates are well below the main policy rate due to the excess cash, and the overnight deposit rate at 0.25 percent serves as a floor for money markets. Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 1000 GMT.