Brussels, 21/12/2011 (Agence Europe) - On Thursday 21 December, the European Central Bank (ECB) lent €489 billion to 523 banks in a special three-year loan scheme announced earlier this month. This was higher than expected by analysts, who had been predicting lending of between €250bn and €450bn.
The banks borrowed a total of €489.1bn from the ECB against assets lodged with the bank at a rate of 1%. The ECB also lent €29.7bn in three-month loans to 72 banks, and €33bn to 34 European banks under swap deals with the Fed (the US Federal Reserve) whereby the ECB can provide unlimited dollar loans to banks for 14 days at an interest rate of 0.58%.
The idea of flooding all this cash into the system is to help banks finance the real economy. The ECB will repeat its three-month lending operation on 29 February 2012. In June 2009, a similar operation lent European banks a total of €442.24bn. (OL/transl.fl)