arabtoday
Last Updated : GMT 06:22:25
Arab Today, arab today
Arab Today, arab today
Home » Banks

ECB credit infusion help stops slump in loans

Arab Today, arab today

Arab Today, arab today ECB credit infusion help stops slump in loans

Frankfurt - Arabstoday

The European Central Bank says the amount lent to businesses by banks leveled off in January after a steep plunge in December highlighting concerns that companies are still finding it hard to find credit as the eurozone debt crisis puts pressure on banks. The monthly loan data Monday were a first look at the effects on the European economy of the ECB’s 489 billion ($657 billion) in emergency, 3-year loans late December to banks hit by the government debt crisis. The ECB is trying to keep banks from cutting back on loans to businesses and consumers and thereby starving the real economy of the credit businesses need to expand and create jobs. The economy of the 17 countries that use the euro shrank by 0.3 per cent in the last three months of 2011, putting it on the verge of an official recession, defined as two straight quarters of falling output. Loans to nonfinancial businesses fell by 1 billion in January, but stabilized after a steep drop of 35 billion in December. Analysts are saying the ECB loan infusion dubbed a longer-term refinancing operation or LTRO appears to have helped steady the situation but concerns about tight credit remain. The ECB will offer more cheap loans to banks on Wednesday. Analyst Carsten Brzeski at ING in Brussels said that while the first ECB loan offer helped financial market sentiment, “the economic impact however remains still limited. As a consequence, this week’s second 3-year LTRO is clearly not redundant.” The ECB loan offering in December has been credited with removing fears of an unexpected bank failure and relieving financial pressure on over-indebted governments such as Italy. Some of Europe’s banks also found it impossible to borrow money normally because of fears they might suffer losses on bonds issued by shaky governments. Before the offering, heavily indebted European governments such as Spain and Italy were foundering as massive sell-offs of their government bonds sent the interest rates they have to pay on their debt soaring over 7 per cent making it economically suicidal for them to continue to borrow on open markets. Shakier banks used the money from the LTRO to pay off their own maturing bonds, while some banks appear to have used the money to buy bonds issued by their own governments. That has eased access to credit for governments and lowered high borrowing costs that threatened them with financial ruin. Analysts indicated there could be a lag between the ECB loans and any increase in credit to the private sector. “The ECB will certainly be hoping that over the coming months banks use an increasing amount of the money borrowed in December’s three-year unlimited tender and the second three-year tender due on Wednesday to lend to businesses and households,” Howard Archer at IHS Global Insight wrote in a research note. He cautioned that “despite January’s lending data, there is still little evidence of a significant early boost in bank lending to the private sector.” The monthly loan data Monday were a first look at the effects on the European economy of the ECB’s 489 billion ($657 billion) in emergency, 3-year loans late December to banks hit by the government debt crisis. The ECB is trying to keep banks from cutting back on loans to businesses and consumers and thereby starving the real economy of the credit businesses need to expand and create jobs.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today ecb credit infusion help stops slump in loans Arab Today, arab today ecb credit infusion help stops slump in loans

 



Arab Today, arab today
Arab Today, arab today Adidas Originals ‘reinterpreted’

GMT 14:52 2016 Thursday ,01 December

Adidas Originals ‘reinterpreted’
Arab Today, arab today Ajman Tourism launches time capsule

GMT 13:17 2016 Friday ,25 November

Ajman Tourism launches time capsule
Arab Today, arab today Paris's matchbox apartments

GMT 10:37 2016 Saturday ,24 September

Paris's matchbox apartments
Arab Today, arab today US-led coalition admits 54 deaths

GMT 08:47 2016 Friday ,02 December

US-led coalition admits 54 deaths
Arab Today, arab today French satire mag hits Germany

GMT 09:52 2016 Thursday ,01 December

French satire mag hits Germany

GMT 02:13 2016 Friday ,02 December

CBE announces start of currency swap mechanism

GMT 22:21 2016 Wednesday ,30 November

Dollar exchange rate stable at key 4 banks

GMT 17:09 2016 Wednesday ,30 November

GIB launches new corporate identity

GMT 16:18 2016 Wednesday ,30 November

Dhaka to open bank for Bangladeshi expats

GMT 02:31 2016 Wednesday ,30 November

EIB offers Tunisia loan worth 100m euros

GMT 20:14 2016 Tuesday ,29 November

China's Central Bank Drains 10bn Yuan from Market

GMT 16:04 2016 Tuesday ,29 November

Alawwal Bank to digitize all branches
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Dino-killing crater shows clues

GMT 14:43 2016 Thursday ,24 November

Dino-killing crater shows clues
Arab Today, arab today Punk memorabilia torched

GMT 13:52 2016 Monday ,28 November

Punk memorabilia torched
Arab Today, arab today Green groups pressure Spain

GMT 13:01 2016 Thursday ,01 December

Green groups pressure Spain
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Hyundai allows Saudi journalists

GMT 15:14 2016 Thursday ,01 December

Hyundai allows Saudi journalists
Arab Today, arab today Latest Infiniti QX to compete

GMT 13:16 2016 Saturday ,26 November

Latest Infiniti QX to compete
Arab Today, arab today To find German funny bone

GMT 12:45 2016 Tuesday ,29 November

To find German funny bone
Arab Today, arab today Car manufacturers to power Europe

GMT 13:01 2016 Tuesday ,29 November

Car manufacturers to power Europe

GMT 08:49 2016 Monday ,28 November

Israeli Arab rapper's music provokes

GMT 11:55 2016 Monday ,21 November

Amal Al-Qubaisi attends reception

GMT 04:15 2016 Thursday ,30 June

World's largest uncut diamond fails

GMT 12:39 2016 Friday ,25 November

Arctic 9-12C above normal

GMT 15:59 2015 Wednesday ,27 May

Seoul elevates gardening to high art

GMT 12:39 2016 Saturday ,26 November

Skin patch could help kids

GMT 09:35 2016 Saturday ,19 November

Hyperloop One settles co-founder

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 09:53 2016 Sunday ,15 May

OMEGA official timekeepers
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Powered and Developed by FilmMatters

Copyright © 2016 Arabtoday

Developed by FilmMatters

© 2016 Arabtoday

arabtoday arabtoday arabtoday
arabtoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabtoday, Arabtoday, Arabtoday