#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 7°C Friday 3 December 2021
Advertisement

ECB pumps €529bn of new cash into European banking system

The second round of unusually lengthy lending sees the ECB lend €529bn to banks, hoping the cash will be passed onward.

Image: Michael Probst/AP

THE EUROPEAN CENTRAL BANK has announced almost €530 billion in new loans to the eurozone’s banks, in a second attempt to ease the difficulties of European consumers and companies in borrowing cash.

The ECB this morning said 800 banks had sought €529.53 billion in medium-term loans, which will be issued tomorrow and mature in February 2015.

The ‘longer-term refinancing operation’ marks the second round of longer-than-usual loans from the ECB, which ordinarily lends cash for either one-month or three-month periods.

The longer loans are an attempt to encourage banks to increase their supply of credit to businesses and consumers, a problem which is generally accepted to be key in helping Europe to overcome the current debt crisis.

The first round of loans, announced just before Christmas, saw banks take €489 billion in loans – though figures in early January indicated that banks were hoarding this cash by storing it in the ECB, and accepting a modest loss, instead of lending it out into the markets.

Read: ECB reports biggest-ever demand from banks for cheap loans >

#Open journalism No news is bad news Support The Journal

Your contributions will help us continue to deliver the stories that are important to you

Support us now

About the author:

Gavan Reilly

Read next:

COMMENTS (11)