Central bank hands out $712 billion in loans
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.