Cen­tral bank hands out $712 bil­lion in loans

The Washington Times Daily - - Business -

FRANK­FURT, GER­MANY | The Euro­pean Cen­tral Bank’s sec­ond of­fer­ing of un­lim­ited low-in­ter­est loans was gob­bled up Wed­nes­day by 800 banks, which bor­rowed $712.4 bil­lion at 1 per­cent in­ter­est for three years.

Nearly $1.4 tril­lion has been pumped into Europe’s fi­nan­cial sys­tem in this way in an at­tempt to sta­bi­lize banks, gov­ern­ments and busi­nesses.

The first of­fer­ing Dec. 21 at­tracted 523 banks to bor­row $657.9 bil­lion and helped ease the euro­zone debt cri­sis be­cause banks used some of the money to buy gov­ern­ment bonds. That helped lower the bor­row­ing costs of heav­ily in­debted coun­tries such as Italy and Spain. How the banks de­ploy this money is an open ques­tion, although the Euro­pean Cen­tral Bank en­ticed smaller banks to par­tic­i­pate in the hope that they would lend to smaller busi­nesses and boost the euro­zone econ­omy.

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