ECB Pumps Cash Into European Markets

For a period of three years

(AP) - The European Central Bank loaned a massive $639 billion to 523 banks for an exceptionally long period of three years to steady a financial system that is under pressure from the euro zone debt crisis. It is the biggest ECB infusion of credit into the banking system in the 13-year history of the euro. 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. More»

Stock futures surge on the news

(NEWSER) - Central banks around the world plan to ease the strain on the global financial system by taking coordinated action to prevent a lack of liquidity, they announced in a statement this morning—news that sent stock futures soaring more than 250 points . The Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and the Swiss National Bank join the Fed in the moves, which the AP reports will, as of next Monday, "reduce the cost of temporary dollar loans to banks—called liquidity swaps—by a half percentage point." NPR explains that'll make it easier for financial institutions to get cash, which they'll hopefully then lend at reduced interest rates. More»

Economists, markets had hoped for 50-point cut

(NEWSER) - The European Central Bank cut interest rates today by 25 basis points, less than expected, to 1.25%. Economists had widely expected a cut double that size, reports the Financial Times, and financial markets soared on the news this morning. The ECB has been more hesitant to cut rates than central banks in the US, Britain, and Japan; bank president Jean-Claude Trichet has said that zero interest rates would be dangerous. More»

US, EU, UK, others offer 50-point reduction to reverse diving markets

(NEWSER) - The Federal Reserve and five other central banks cut interest rates by 50 basis points in an emergency attempt to stem the economic effects of the credit crisis, reports Bloomberg. The move brings the American benchmark rate to just 1.5%, while the European Central Bank and the monetary authorities of the UK, Canada, Switzerland, and Sweden all joined in the action. China also cut rates by more than a quarter-point. More»

Analyst gives four signs of sanity to scan your tea leaves for

(NEWSER) - The main thing ailing the credit markets is a crisis of information, writes L. Gordon Crovitz in the Wall Street Journal, so it’ll probably end when we have some. Things may be looking up when…

• Prices are discovered: Right now, there’s no demand for mortgage-backed securities, and hence no price. When we see some transactions that don’t involve the government, the picture will be clearer.