Thursday, August 9, 2007
There may be trouble ahead..
Things seem to be swinging into action for the credit crunch: The European Central Bank took emergency action on Thursday to stabilise money markets amid broadening fears of a liquidity crunch. It injected €94.8bn as part of an unlimited cash offer to borrowers at its main lending rate of 4 per cent after overnight rates shot up to 4.7 per cent, their highest in nearly six years. ”This liquidity-providing fine-tuning operation aims to assure orderly conditions in the euro money market. The ECB intends to allot 100 percent of the bids it receives,” the central bank said when it called for bids.