ECB extends cash lifeline to banks
Sunday, 13 June 2010
From Fazle Rashid
NEW YORK, June 12: The European Central Bank (ECB) has extended its cash lifeline to banks in Europe suffering from liquidity crunch with its President Jean-Claude Trichet pleading with euro zone national regulators to take steps to "resuscitate confidence in the health of their financial institutions"
Fears among European banks about each other's creditworthiness have caused them to cut inter-bank lending with calls for bank regulators to share more information about which institutions may be most vulnerable to the sovereign debt crisis, the New York Times (NYT) in a report said.
The ECB has committed to provide at least three more rounds of unlimited, three-month loans at the benchmark interest rates. The announcement has reassured ailing banks that emergency cash will be available at least through the end of the year. The ECB is confronting critical time as it will have to steer policy through financial turmoil, very weak growth in eurozone and deflation in some countries, an analyst said.
The ECB has become concerned about the financial market tensions which escalated dramatically last month as a result of the eurozone debt crisis. "We have a market which is not functioning perfectly", the ECB president was quoted as saying. The ECB's decision to acquire eurozone government bonds, in addition to emergency lending, has run into rough weather in Germany
All Eurozone countries have announced austerity measures that include pay cut, freezing government spending and other wasteful expenditures. Government inaction on spending would lead to harsher times ahead, an analyst said. The ECB as of June 4 purchased bonds worth 40.5 billion euros. In another indication of tension in the money market, banks have been depositing record sums at the ECB where cash earns 0.25 per cent interest, rather risk lending to each other, the NYT in a report said.
Britain's new prime minister David Cameron has warned people that planned spending cuts would be the deepest in generation and affect every single person in the country.
There is very little money any where to lend or give financial assistance. The rare exception being China. International financial aid will sink to its lowest level in coming few years, analysts are predicting. This warning will have a bearing on countries like Bangladesh. The austerity measures will become all too important for such countries to fend for themselves. The pay hike to government servants and lawmakers giving themselves hefty pay rise will have to be kept in abeyance. India and Pakistan have done the same.
NEW YORK, June 12: The European Central Bank (ECB) has extended its cash lifeline to banks in Europe suffering from liquidity crunch with its President Jean-Claude Trichet pleading with euro zone national regulators to take steps to "resuscitate confidence in the health of their financial institutions"
Fears among European banks about each other's creditworthiness have caused them to cut inter-bank lending with calls for bank regulators to share more information about which institutions may be most vulnerable to the sovereign debt crisis, the New York Times (NYT) in a report said.
The ECB has committed to provide at least three more rounds of unlimited, three-month loans at the benchmark interest rates. The announcement has reassured ailing banks that emergency cash will be available at least through the end of the year. The ECB is confronting critical time as it will have to steer policy through financial turmoil, very weak growth in eurozone and deflation in some countries, an analyst said.
The ECB has become concerned about the financial market tensions which escalated dramatically last month as a result of the eurozone debt crisis. "We have a market which is not functioning perfectly", the ECB president was quoted as saying. The ECB's decision to acquire eurozone government bonds, in addition to emergency lending, has run into rough weather in Germany
All Eurozone countries have announced austerity measures that include pay cut, freezing government spending and other wasteful expenditures. Government inaction on spending would lead to harsher times ahead, an analyst said. The ECB as of June 4 purchased bonds worth 40.5 billion euros. In another indication of tension in the money market, banks have been depositing record sums at the ECB where cash earns 0.25 per cent interest, rather risk lending to each other, the NYT in a report said.
Britain's new prime minister David Cameron has warned people that planned spending cuts would be the deepest in generation and affect every single person in the country.
There is very little money any where to lend or give financial assistance. The rare exception being China. International financial aid will sink to its lowest level in coming few years, analysts are predicting. This warning will have a bearing on countries like Bangladesh. The austerity measures will become all too important for such countries to fend for themselves. The pay hike to government servants and lawmakers giving themselves hefty pay rise will have to be kept in abeyance. India and Pakistan have done the same.