ECB lends nearly 500bn Euros to 500 banks in bid to stop new credit crunch

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ECB lends nearly 500bn Euros to 500 banks in bid to stop new credit crunch

December 29th, 2011

FAKE NEWS for the Zionist agenda

€489billion (£409.3billion) is the biggest ever loan issue for a central bank
ECB hope banks will start buying up Italian and Spanish bonds to ease the sovereign debt crisis
Market experts say ECB will have to buy bonds directly if they are to ease the crisis – something they don’t want to do

By
Hugo Duncan

Last updated at 12:27 AM on 22nd December 2011

Struggling European banks yesterday snapped up more than £400billion in emergency aid to stave off another credit crunch.

The European Central Bank gave loans worth 489billion euros (£407billion) to 523 lenders in the eurozone.

The scale of the operation – the ECB’s biggest ever funding scheme – was far larger than anyone expected and showed how desperate banks in the single currency bloc are for funds.

Loan issue: The European Central Bank, based in Frankfurt, has loaned 489billion euros to 523 unnamed banks, it emerged today

But the move failed to impress
financial markets, with the FTSE 100 index in London falling 29.86
points to 5389.74. In Frankfurt and Paris, stock markets were down
nearly 1 per cent.

The yield on Italian bonds – the
interest rate the government in Rome has to pay to borrow – remained
close to the seven per cent ‘danger zone’.

It came as a senior British banker
warned that the collapse of the single currency would be ‘horrific’ for
businesses and families in the UK and around Europe.

Sir Philip Hampton, chairman of
state-supported Royal Bank of Scotland, said it ‘would produce massive
strains around the banking system’ and trigger another wave of
taxpayer-funded bailouts.

The Organisation for Economic
Cooperation and Development added to the gloom with a warning that
Germany, Europe’s largest economy, has entered a ‘mild recession’.

Analysts said the outlook was even
bleaker in debt-ridden Italy after figures showed its economy shrank by
0.2 per cent between July and September.

Raj Badiani, an economist at analyst IHS Global Insight, said Italy faced ‘a painful and prolonged recession’.

The deepening crisis in the region
and fears of a chaotic break-up of the euro prompted the ECB to flood
the banking system with cash.

Lending between banks and to
businesses and households has all but dried up amid concerns that
borrowers will not be able to repay their loans.

The cheap three-year loans offered by
the ECB are designed to free up lending and avoid a rerun of the credit
crunch in 2007 and 2008 that led to the global recession.

It is also hoped the banks will use
the money to buy government debt in troubled countries such as Italy and
Spain, likely to be the next dominos to fall following the bailouts of
Greece, Ireland and Portugal.

But analysts warned banks will simply hoard the cash to shield themselves from losses as the eurozone unravels.

Justin Urquhart Steward, of Seven
Investment Management in London, described it as a ‘cash-for-trash
mechanism’ to persuade banks to buy Italian and Spanish debt.

U.S. ‘FACES DOWNGRADE’

America’s AAA credit status could be
downgraded within two years because of its debt crisis, the ratings
agency Fitch warned last night.

Meanwhile, Hungary’s credit rating
was downgraded to a ‘junk’ BB+ grade by ratings agency Standard
Poor’s.

The European Central Bank has lent nearly €489billion to the continent’s banks in a bid to boost confidence in the eurozone, it was revealed today.

Carsten Brzeski, an economist at ING
bank, said: ‘Banks won’t have to worry about liquidity for three years.
Whether the ECB’s hopes that the money will filter through to the real
economy will be fulfilled remains to be seen.’ Sir Philip said RBS was already
planning for the break-up of the eurozone and the mass withdrawal of
cash from banks in any country that quits the single currency.

‘Everybody has got the contingency
plans,’ he told Jeff Randall’s Christmas Dinner, due to air on Sky News
tonight. ‘I think it’s likely that a small country will drop out,’ he
said.

But he added: ‘The euro probably will hold together because the implications of it falling apart are so horrific.’

Sir Philip also said the behaviour of
bankers in the build-up to the financial crisis was ‘absolutely
shocking’, adding: ‘I understand the anger against bankers. I am angry
myself.’

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Watch Sky news Nigel Farage on Youtube Dec11 – The arrogance of these Europeans is beyond belief..!
The sooner out the better…

– Martin@hsf, Canterbury, Ebgland, 22/12/2011 09:06

the big question is WHO IS ACTING AS GUARANTOR TO THE ECB?
Effectively they are buying their own debt? This will end in tears
or the IMF will have to step in, and that means we will have to dip in to are already empty pockets again. Surely its time to have a referendum and then get the hell out of this nonsense

– Speak as i find, Crawley down, 22/12/2011 08:33

What a surprise. Father Christmas has lost the plot.

– Shughey, Gloucester, 22/12/2011 08:27

More money out there,more Debt, can i borrow a Million ?

– s white, leeds, 22/12/2011 07:45

this money is not for new purposes , they are just rolling over old debt for new cheaper debt , none will reach us

– stephen, belfast, 22/12/2011 07:16

The European Central Bank gave loans worth 489billion euros (£407billion) to 523 lenders in the eurozone………………..Taking a cheap loan from the ECB is no different to an individual taking a loan from a pawnshop like moneyshop.tv. They can be very enticing to grab, but could cost dearly in future. Be careful keep away from the EU pawnshop.

– richard, ilford essex, 22/12/2011 06:53

The Ralph doesn’t live in Bremen. He lives next door to me. I’ve seen him out back peeing on his compost heap.

– CU, UK, 22/12/2011 05:35

And lost amongst the small print Cameron looks about to sign up to the new treaty. No referendum and yet a hero ‘euro-sceptic’ in the eyes of the fickle UK electorate. Suckered Once more by the EU. – Simon, Barnstaple, UK., 22/12/2011 1:16——- What new treaty? The one that the DM has fabricated? Even the one fabricated by the DM would only affect members of the Eurozone so it would, if it existed, transfer no further powers from the UK to the EU.
– John S, Bromley, 22/12/2011 01:43
Google ESM Treaty old son, then let me know what you think. Chapter 6 makes me think.

– CU, UK, 22/12/2011 05:21

its madness who ever got out of debt by borrowing even more,let those banks fail

– george, cornwall, 22/12/2011 02:09

And lost amongst the small print Cameron looks about to sign up to the new treaty. No referendum and yet a hero ‘euro-sceptic’ in the eyes of the fickle UK electorate. Suckered Once more by the EU.
– Simon, Barnstaple, UK., 22/12/2011 1:16——- What new treaty? The one that the DM has fabricated? Even the one fabricated by the DM would only affect members of the Eurozone so it would, if it existed, transfer no further powers from the UK to the EU.

– John S, Bromley, 22/12/2011 01:43

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