Wednesday, November 28, 2007
Institutions hoarding cash
The European Central Bank has promised to supply the money markets with an extra €30bn (£22bn) in one-week funds, in another indication that the credit crisis is far from over. The ECB sold €178bn of these funds to eurozone financial institutions, compared with the €148bn it had previously said the banks would need for routine business. The New York Federal Reserve announced on Monday it was implementing several measures to increase liquidity in the parched credit markets. The Fed and ECB actions are designed to quell fears that there will not be enough money available to the markets, as financial institutions "hoard cash".