European central banks offer USD 80b more

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Cash offer offered by the European Central Bank and the Bank of England on Tuesday will help soothe volatile money market.

23 September 2008

FRANKFURT --  The European Central Bank and the Bank of England offered another USD 80 billion (CHF 86.38 billion) in cash on Tuesday to shore up the shaky global financial system and keep liquidity flowing between banks.

The European Central Bank offered up USD 40 billion in an overnight Tuesday tender operation, though it wouldn't announce the amount subscribed or the number of bidders until later in the day.

The Bank of England said Tuesday it also was also offering up another USD 40 billion in its ongoing overnight operation, and would make public later Tuesday the amount subscribed and the number of bidders.

The Swiss National Bank also said it was continuing to provide overnight dollar liquidity to markets but wouldn't offer more details. The bank has said in the past it will continue to supply markets in "a flexible and generous manner".

The moves come after a series of concerted actions last week with central banks in Canada, the United States, Japan and Canada to supply cash to banks that had become leery of lending to one another in the aftermath of the bailout of major insurer American International Group and the bankruptcy of U.S. investment bank Lehman Brothers.

The ECB said in a statement last week that they would continue to "work together closely and will take appropriate steps to address the ongoing pressures."

[AP / Expatica]

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