Demand for cheap loans from ecb soared on dec 21 2011

Demand for cheap loans from ecb soared on dec 21 2011 ; The ECB is trying to make sure that banks have enough ready cash so they can keep on lending to businesses. Otherwise, a credit crunch could choke off growth and spread the debt crisis to the wider economy through the banks.

Demand for cheap loans from the European Central Bank soared on Wednesday, as the ECB offered billions of Euros worth of three-year loans to the region’s major banks. The banks will have to pay the loans back at a 1% interest rate.

The extremely high demand shows just how badly many banks need longer-term funding. The ECB lent out 489 billion Euros, well ahead of expectation for 300 billion Euros, the New York Times reported. Bond yields for Italy and Spanish debt initially fell, but as the day wore on they rose again. read more For the latest updates PRESS CTR + D or visit Stock Market news Today

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