The European Central Bank opened up its overnight auctions to thousands more European banks on Friday, as it continued to try and find a solution to the problems plaguing money markets.
Up until now only 136, mainly large banks, were eligible to take part in the ECB’s so-called ‘fine tuning’ operations in which it either pumps money in or sucks excess money out of the Euro money market system. But the move opens them up to 1,739 medium sized and smaller banks which can already tap the ECB for longer term loans.
“From 6 October 2008 until further notice, all institutions that are eligible to participate in Eurosystem open market operations based on standard tenders and that fulfill additional operational or other selection criteria... will also be eligible to participate in quick tenders” the ECB said in a statement. (Reuters)