Brussels, 15/09/2008 (Agence Europe) - The European Central Bank (ECB) has decided to act following the bankruptcy of the fourth-largest American investment bank, Lehman Brothers, which has shaken the European and world markets. On Monday 15 September, it decided to inject €30 billion into the money markets, while 51 other institutions have made offers of a total of over €90 billion. The Bank of England has injected around €6.4 billion into the market and the Swiss National Bank has also offered liquidity at advantageous rates without specifying the amount.
The ECB “continues to closely monitor the conditions in the euro area money market”, it said in a brief press release. “The Commission in general and Commissioner Joaquin Almunia are closely following developments and are confident of good coordination among central banks, regulators and the private sector”, a European Commission spokesperson said. According to the German finance minister, the links between German banks and Lehman Brothers are “controllable and can be dealt with”. French banks' exposure is also said to be “manageable”.
The tension on the markets is still palpable. The troubles at Lehman Brothers have been joined by problems at Merrill Lynch, another bank whose situation has deteriorated considerably since the beginning of the mortgage credit crisis and was bought on Monday by the Bank of America. Against this backdrop the dollar began by falling against the euro and the price of oil dropped by more than $6 in one day, ending at around $95 a barrel. (A.B./transl.fl)