Voice Of America
Wednesday, December 21, 2011
The European Central Bank is lending a record amount of money to banks in the 17 nations that use the euro in hopes of limiting the widespread effects of the governmental debt crisis.
The central bank said Wednesday it would make $638 billion in three-year loans to 523 banks in an effort to encourage them to advance credit to businesses and consumers and buy the government bonds of debt-ridden governments.
It was the biggest cash infusion into the continent’s banking system in the 13-year history of the euro.
But numerous analysts said the large amount may be too little to help cash-short banks worried that some governments could default on their loans. The analysts said banks, rather than making new loans to spur the eurozone’s stagnant economy or buying governmental securities, might simply add the cash to their reserves or use it to refinance their own debts.
This article was posted: Wednesday, December 21, 2011 at 9:00 am