ECB lends banks $502 billion, easing cash drought

The European Central Bank loaned 348.6 billion euros ($501.5 billion) for two weeks to banks to bring down the cost of money at year-end. The ECB said 390 banks bid for the two-week loans at a marginal rate of 4.21%. Bids ranged from 4% to 4.45%. The reluctance to lend money after the collapse of the U.S. subprime market pushed interbank euro rates for two weeks to the highest level at least six years earlier this week. The rate banks charge each other for two-week euros fell to 4.45% from 4.94%, the European Banking Federation said today [18 Dec 2007].

Borrowing costs jumped in August as banks, including Bear Stearns Cos. and Merrill Lynch & Co., began to reveal losses on securities linked to U.S. mortgages aimed at people with poor credit histories. Losses from U.S. subprime mortgage foreclosures will probably reach $300 billion, the Organization for Economic Cooperation and Development [OECD] predicted on Nov. 22. The slump in global credit markets may force banks, brokerages and hedge funds to cut lending by $2 trillion and trigger a "substantial recession" in the U.S., Goldman Sachs forecast on Nov. 16. The ECB first offered extra cash on Aug. 9, when it lent an unprecedented 95 billion euros in emergency funding to banks.

Post a Comment:

Comments are closed for this entry.

« Indonesian firms to... | Main | Nanosolar 'prints'... »

Most popular blog postings on lowem.log :

1. Singapore SIBOR interest rates fall to 1.5%, lowest since Dec 2004
2. Singapore SIBOR rate falls to 1.31%, lowest since Nov 2004
3. Live spot gold price quotes chart on COMEX
4. Fuel prices seen stoking Malaysia inflation in 2008
5. 2010 Honda Civic Hybrid preliminary specifications released
6. Singapore SIBOR rate fell to 1.25% in Apr 2008, lowest since Aug 2004
7. Malaysia inflation rate jumps to 7.7% in Jun 2008, a 26-year record high
8. Singapore : electricity tariffs to increase April 2008 on rising oil prices

Featured articles on lowem.log :

1. ABC Guide to Beating Inflation in Singapore and Elsewhere
2. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008
3. Singapore : Bread price inflation continues
4. 2010 Honda Civic Hybrid preliminary specifications released
5. Peakoiler buys 2008 Honda Civic Hybrid FD3
6. How to insert currency exchange rates into Google Spreadsheets
7. Singapore SIBOR rate falls to 0.94% in Nov 2008, lowest since Jul 2004
8. Singapore : Inflation erodes away bank savings