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ECB provides 530bn euros of cheap loans for banks | ECB provides 530bn euros of cheap loans for banks |
(about 1 hour later) | |
The European Central Bank (ECB) has provided a further 530bn euros ($713bn; £448bn) of low-interest loans to 800 banks across the European Union. | The European Central Bank (ECB) has provided a further 530bn euros ($713bn; £448bn) of low-interest loans to 800 banks across the European Union. |
It is the second time the ECB has offered such three-year loans and comes after 489bn euros was lent in December. | It is the second time the ECB has offered such three-year loans and comes after 489bn euros was lent in December. |
The loans are aimed to help continue to ease the eurozone debt crisis, and help banks improve their liquidity. | The loans are aimed to help continue to ease the eurozone debt crisis, and help banks improve their liquidity. |
They have also helped countries such as Italy, as some banks have used the bonds to buy government bonds. | They have also helped countries such as Italy, as some banks have used the bonds to buy government bonds. |
'Unprecedented expansion' | 'Unprecedented expansion' |
Although the ECB has not revealed which banks have taken part, UK lender HSBC confirmed to the BBC that it had borrowed about £350m. | Although the ECB has not revealed which banks have taken part, UK lender HSBC confirmed to the BBC that it had borrowed about £350m. |
Lloyds Banking Group also confirmed that it had drawn £11.4bn. | |
The markets appear to have welcomed the announcement, with banking shares rising strongly. | The markets appear to have welcomed the announcement, with banking shares rising strongly. |
In Germany, shares in Commerzbank were up 3.6% while Deutsche Bank was 1.7% higher. | In Germany, shares in Commerzbank were up 3.6% while Deutsche Bank was 1.7% higher. |
Credit Agricole saw the biggest gains in France, climbing 4.5%, followed by Societe Generale, which rose 2.3%. | Credit Agricole saw the biggest gains in France, climbing 4.5%, followed by Societe Generale, which rose 2.3%. |
In the UK, shares in Barclays were up 1.7%, while HSBC added 0.6%. | In the UK, shares in Barclays were up 1.7%, while HSBC added 0.6%. |
Commentators said that the amount of money lent, and the number of banks which had taken part, was in line with expectations. | Commentators said that the amount of money lent, and the number of banks which had taken part, was in line with expectations. |
Banking analyst Luca Cazzulani of Unicredit said: "This will increase the level of excess liquidity pretty sharply, which is ultimately positive or very positive for risk trades. | Banking analyst Luca Cazzulani of Unicredit said: "This will increase the level of excess liquidity pretty sharply, which is ultimately positive or very positive for risk trades. |
"Italian and Spanish bonds are likely to benefit from this and equity markets as well." | "Italian and Spanish bonds are likely to benefit from this and equity markets as well." |
BBC business editor Robert Peston said the central bank's move represented "a massive, perhaps unprecedented, expansion of the ECB's balance sheet". | BBC business editor Robert Peston said the central bank's move represented "a massive, perhaps unprecedented, expansion of the ECB's balance sheet". |