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European Banks Loosen Purse Strings

Inject billions into markets; offer more to keep crisis at bay

By Jim O'Neill,  Newser User

Posted Sep 15, 2008 10:02 AM CDT
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(Newser) – The weekend’s storm on Wall Street has prompted Europe’s central bankers to make billions of dollars available on the cheap to global money markets as a levee against a rising flood of fresh turmoil, the New York Times reports. The European Central Bank has pledged $43 billion and the Bank of England $9 billion to help stabilize markets.

While central banks said they expect additional casualties as the credit market shakes out, the speed with which Lehman, AIG, and Merrill Lynch deteriorated has them concerned about European banks. “Is this part of the healing process—some institutions need to go to get over this—or does this have the potential to be a new source of uncertainty?” said one economist.

The Bank of England will be monitoring carefully the conditions in sterling money markets and will take appropriate actions if necessary to stabilize those markets, it said in a statement.
"The Bank of England will be monitoring carefully the conditions in sterling money markets and will take appropriate actions if necessary to stabilize those markets," it said in a statement.   (AP Photo)
The Bank of England said it would lend nearly $9 billion over the next few days to institutions facing liquidity issues.
The Bank of England said it would lend nearly $9 billion over the next few days to institutions facing liquidity issues.   (AP Photo)
People pass The Bank of England in London, Thursday, June 19, 2008.
People pass The Bank of England in London, Thursday, June 19, 2008.   (AP Photo/Kirsty Wigglesworth)
Japanese tourists walk by the the Euro sculpture at the European Central Bank, ECB, in Frankfurt, Germany.
Japanese tourists walk by the the Euro sculpture at the European Central Bank, ECB, in Frankfurt, Germany.   (AP Photo)
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US crisis hits European stock markets
AFP

Lehman collapse may increase the cost of borrowing
Bloomberg

Money • World

 
Merrill Lynch • Lehman Brothers • European Central Bank • Bank of England • Swiss National Bank • financial crisis

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