ECB Pumps Cash Into European Markets

Key interest rates left unchanged in effort to reduce turmoil
By Sam Gale Rosen,  Newser Staff
Posted Sep 6, 2007 1:25 PM CDT
The Euro sculpture photographed with a zoom lens is seen in front of the European Central Bank in Frankfurt, central Germany, in this Nov. 30, 2005 file photo. The euro soared to a new high against the...   (Associated Press)
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(Newser) – The European Central Bank pumped $57.7 billion of emergency cash into the markets today and left their key interest rates unchanged, in an effort to ease the cost of borrowing and calm markets made volatile by the US subprime collapse, Bloomberg reports. The ECB action followed a day in which borrowing costs reached their highest point in six years.

The action may soothe the market, but "whether it will ultimately resolve the situation remains to be seen," says a Frankfurt strategist. All told, central banks around the world added more than $350 billion to money markets between Aug. 9 and Aug. 14, reacting to the credit squeeze caused by American mortgage market woes.