European banks borrow $640bn from ECB

22 December 2011

Banks across the eurozone have borrowed €489.19 billion ($640 billion) from the European Central Bank (ECB) yesterday (21 December).

Financiers decided to take full advantage of the cost-effective loans on offer as they seek cheap credit to boost their financial situation as the eurozone debt crisis rumbles on.

A total of 523 lenders decided to take out the ECB's offering of a three-year loan package - a figure that far exceeded the expectations of professionals in the market and effectively ended the immediate possibility of the region suffering another credit crunch.

Nick Matthews of the Royal Bank of Scotland admitted the measure is good for the banking sector, but added it will not resolve the whole problem.

"While the action is very important to help stabilise the situation and reduce the funding risk for the banks, it is unlikely to bring about a turning point in this crisis," he told the Daily Telegraph.

By Gary Cooper

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