ECB renews $40b loan offer

September 25, 2008
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, FRANKFURT, September 25 – The European Central Bank renewed on Thursday its offer of 40 billion dollars (27 billion euros) in one-day loans, it said in a statement.

The ECB and the US Federal Reserve have established a currency swap to provide eurozone banks with access to dollars amid tension fuelled by the turmoil in the US banking sector.

Major central banks agreed last week to inject hundreds of billions of dollars into money markets that have been battered by the chronic financial crisis.

Since September 18, the ECB\’s dollar tenders have generally met with strong demand from financial institutions which need the cash to continue providing the credit on which business depends.

On Wednesday however, the demand was not as strong as in previous days.

The Bank of England has also been offering a similar amount of dollars to British financial institutions.

In Washington meanwhile, the US Congress was wrangling over a 700-billion-dollar rescue plan designed to bail out the troubled financial industry, which is reeling under the weight of bad mortgage loans.

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