money market update as 12 18 2007

--The ECB loaned a record 348.6 billion euros ($501.5billion) for two weeks at 4.21 percent today, almost 170 billion euros more than it estimated was needed. Banks also borrowed about 2.4 billion euros at 5 percent yesterday, the most sinceSept. 26, the ECB said. --Central banks in the U.S., U.K., Canada, Switzerland andthe euro region are responding to more than $70 billion offinancial institution losses on securities linked to U.S.subprime mortgages. The Fed held the first of four cash auction syesterday, offering $20 billion in one-month loans. The resultswill be announced tomorrow. --The amount banks charge each other for two-week loans ineuros dropped 49 basis points to 4.45 percent, the EuropeanBanking Federation said. The rate had climbed 83 basis points inthe past two weeks. --The reduction in the lending rate is the first sign central banks' efforts to revive interbank lending are succeeding. The TED spread fell to 1.8 percentage points today, from a four-month high of 2.21 percentage points a week ago.