ECB offers more cash to European banks

The European Central Bank offers more cash to European banks in its ongoing effort to shore up the global market.

The ECB is pumping more cash into European banks in an attempt to settle the market.

The European Central Bank offered more cash to European banks today in its ongoing effort to shore up shaky global markets and keep liquidity flowing between banks reluctant to lend to one another. The Frankfurt-based ECB, the central bank for the 15 countries that use the euro, offered up US$40 billion (Dh146.9 billion) today. Yesterday, the ECB and the Bank of England offered up a combined US$80 billion.

In Zurich, the Swiss National Bank has also provided overnight dollar liquidity to markets. The moves follow a series of concerted actions last week with central banks in Canada, the US and Japan to supply cash to banks that had become leery of lending to one another in the aftermath of the bailout of major insurer American International Group and the bankruptcy of US investment bank Lehman Brothers.

Russia, predicting credit problems with its own banks, started an auction which was later cancelled. The 300 billion roubles (Dh44 billion) of budget funds was met with a lack of demand from commercial banks, a sign that banking liquidity situation is improving. * AP