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
"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)
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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.