ECB lends banks $639 billion over 3 yrs
The European Central Bank (ECB) is lending €489 billion ($639 billion) to the continent’s banks for an unprecedented three years in an effort to bolster Europe’s stressed financial system.india Updated: Dec 21, 2011 23:06 IST
The European Central Bank (ECB) is lending €489 billion ($639 billion) to the continent’s banks for an unprecedented three years in an effort to bolster Europe’s stressed financial system.
The ECB said on Wednesday that 523 banks took the loans. It didn’t identify the banks involved. Demand far exceeded market expectations of around €300 billion.
It was the biggest ECB bank liquidity operation ever, surpassing the €442 billion in one-year loans from June, 2009.
The ECB previously had given credit over periods of 13 months at most. Extending that is meant to reassure markets that banks will have long-term financing amid tensions triggered by the euro zone debt crisis.
The ECB has served as lender of last resort for banks when they cannot borrow elsewhere.
Meanwhile, the chairman of the Eurogroup said European Union finance ministers could not agree on providing €200 billion in new loans to the International Monetary Fund in an effort to boost their crisis firewall.
Jean-Claude Juncker, the prime minister of Luxembourg who also chairs euro zone finance ministers meetings, said on Monday that euro zone states would provide an extra €150 billion to the IMF. He said non-euro states Denmark, Poland, the Czech Republic and Sweden would also contribute, without providing amounts.