Thursday, August 9, 2007
ECB pump money $132 bil
--The European Central Bank, in annprecedented response to a sudden demand for cash from banksoiled by the subprime mortgage collapse in the U.S., loaned4.8 billion euros ($130.2 billion) to assuage a credit crunch. The overnight rates banks charge each other to lend inollars jumped to the highest in six years. The so-called dollar London interbank offered rate rose to 5.86 percent today from .35 percent and in euros gained to 4.31 percent from 4.11ercent.
--The ECB's response to the fastest increase in the dollarank rate since June 2004 signals that lenders are reducing theupply of money as losses triggered by the U.S. mortgage slumppread worldwide.
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