European Central Bank Injects Funds To Calm Credit Jitters
The European Central Bank injected 94.841 billion euros ($129.74 billion) into euro-zone money markets on Thursday to help calm to jittery markets roiled by credit problems.
The ECB said it had allotted 1-day securities at a fixed rate of 4.00% to all banks bidding for funds, as it had promised earlier in the day when it launched the tender.
"This liquidity-providing fine-tuning operation aims to assure orderly conditions in the euro money market. The ECB intends to allot 100 percent of the bids it receives," the ECB said when it called for bids.
Shortly after the tender results, overnight borrowing rates retreated to around 4.10%, a little above the ECB's 4% target rate but down markedly from 4.62%.
Earlier, rates spiked to their highest level since October 2001 on market nervousness that U.S. subprime problems were hitting European banks.
The ECB said 49 banks participated in the tender.