ecbhas made loans of £446bn to banks
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

ECB has made loans of £446bn to banks

Arab Today, arab today

Arab Today, arab today ECB  has made loans of £446bn to banks

Athens - Arabstoday

The European Central Bank (ECB) has made £446 billion in low-interest loans to banks in the second round of a massive credit infusion that has been credited with easing the eurozone debt crisis. The offer of credit for three years was taken up by 800 banks today. The uptake was modestly higher than the £413 billion handed out to 523 banks at a first offering on December 21. Banks used some of the money from the first round of loans to buy government bonds. That lowered borrowing costs for hard-pressed governments struggling to maintain large amounts of debt, and eased fears of a market meltdown from Europe's troubles with too much government debt. The ECB loans, given against collateral such as bonds or other securities, cost banks the average of the ECB's benchmark rate over the life of the loan, which is currently 1%. Analysts had expected the amount of new loans to come in just under that for the first offering. The first offer of three-year, low-interest credit to banks on December 21 has been credited with easing fears of a financial meltdown in the eurozone due to lack of confidence with governments with too much debt and too little growth. The cash infusion removed fears that banks in Europe might collapse because of inability to pay off bonds or other debt coming due. Following the first credit infusion, bank funding markets frozen late last year began to thaw, as some banks have been able to issue new debt. More crucially for eurozone governments, some banks in financially-pressed countries such as Italy and Spain appear to have used the cheap money to buy government bonds. That has brought down borrowing costs, especially on shorter-term bonds, and taken some of the pressure off governments such as Spain and Italy. High borrowing costs are a key driver of the eurozone debt crisis. Greece, Ireland and Portugal all had to turn to other eurozone governments and the International Monetary Fund (IMF) for bailout loans when they could no longer borrow at affordable rates. The new governments of Spanish prime minister Mariano Rajoy and Italian prime minister Mario Monti are pushing for reforms to their labour markets, aimed at making their economies more productive and business-friendly. That should increase growth and tax revenues, but the measure will take years to take effect. The ECB cash infusion is seen as buying time for economic reform. But the first round had less effect on banks' lending to the wider economy. Loans to businesses only stabilised in January after a steep fall in December. ECB president Mario Draghi encouraged banks to take the credit, saying there was "no stigma" or sign of weakness associated with it and participating was only a "business decision". Other ECB officials have indicated that markets should not get used to such massive rescue operations from the central bank. Peter Praet, a member of the six-person executive board and the ECB official responsible for the bank's economists, has said the bank will face a difficult balancing act in judging when to withdraw the additional credit. ECB governing council member Ewald Nowotny has said he sees no need for further action after the second instalment of loans. Jens Weidmann, head of the conservative Bundesbank, Germany's central bank, has warned that over-generous liquidity could lead to banks investing in riskier assets. "The crisis cannot be resolved solely by throwing money at it," Mr Weidmann warned in a speech last week. "While money can buy us time to tackle the crisis, it is imperative that we use that time in order to address its root causes."

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

ecbhas made loans of £446bn to banks ecbhas made loans of £446bn to banks

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

ecbhas made loans of £446bn to banks ecbhas made loans of £446bn to banks

 



GMT 09:55 2017 Wednesday ,19 April

Filipino president arrives in Saudi

GMT 12:47 2017 Sunday ,06 August

Hend Saeed Saleh reveals secrets of his father

GMT 01:49 2016 Wednesday ,15 June

Swedish SAS pilots agree to end strike

GMT 13:52 2018 Tuesday ,09 January

Berri, Richard tackle current situation

GMT 07:24 2017 Sunday ,24 December

Nelson Mandela, anti-apartheid icon, dies at 95

GMT 15:16 2017 Sunday ,17 September

Four killed in market explosion in Afghanistan

GMT 23:03 2017 Wednesday ,06 December

FNC Speaker receives President of Nepal

GMT 05:41 2017 Tuesday ,29 August

Kenya bans plastic bags in bid to fight pollution

GMT 05:00 2017 Wednesday ,06 September

War-divided Syrians unite over football spot

GMT 01:07 2016 Tuesday ,30 August

China reviews inbound investment laws

GMT 02:32 2017 Thursday ,11 May

Own a business in Oman? Haya Water warns traders

GMT 23:07 2017 Thursday ,16 November

Jordan condemns terrorist attack in New York

GMT 16:16 2013 Monday ,15 April

Fewer Americans view their income taxes as fair
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday