The European Central Bank (ECB) injected three-month funds worth €40 billion ($54.2 billion) into Europe’s banking system Thursday to ease lending between commercial banks.
This is the first time for the central bank of the 13-state eurozone to allot three-month funds into commercial banks outside its normal monthly schedule. The move was “a technical measure aimed at supporting the normalization of the functioning of the euro money market,” the Frankfurt-based central bank said. According to local media reports, some 146 banks had bid for the latest European Central Bank funds, compared to 144 at the ECB’s regular allotment of three-month funds on July 25. The banks asked for a total of €125.8 billion ($170.76 billion) in funding, and the ECB allotted its €40 billion at an average rate of 4.61%.
Over the past weeks, the ECB has pumped more than €200 billion ($271.5 billion) into the banking system to counter fears that the banks have been widely exposed to losses from the home loans crisis in the United States. (people.com.cn)