European Central Bank injects 95B euros into markets
Posted on August 9th, 2007 by bile Categories and Tags: Uncategorized, China, debt, EUR, European Central Bank, European Union, Federal Reserve, Frankfurt, GBP, London, New York, United States, US Federal Reserve, your moneyhttp://business.timesonline.co.uk/…
Shares slumped again on both sides of the Atlantic today after the European Central Bank was forced to inject a record 95 billion euros (£65 billion) into money markets as mounting global credit jitters sparked an abrupt scramble for cash by financial institutions.
The unprecedented emergency action by the Frankfurt-based ECB outstripped even the scale of its intervention on the day after the September 11, 2001, terrorist strikes on the US, when it pumped in 69 billion euros of liquidity to stabilise credit markets.
The move badly unnerved already rattled investors and sent shares tumbling in London and New York as it fuelled anxieties over the global credit squeeze. Amid record trading volumes in the City, the FTSE 100 index lost 122.7 points, or 1.9 per cent.
In New York, the Dow Jones industrial average plummeted by 387.2 points, or 2.8 per cent, closing at 13,270.7, in its worst losses since a 416-point plunge in February, when investors were shaken by a drastic sell-off in China’s stock markets.
“[ECB] made clear that it was ready to provide unlimited funds at 4 per cent and ended up providing some 94.8 billion euros.” “… the US Federal Reserve providing $24 billion as part of daily money market operations, against only $5 billion provided on Thursday last week.” Inflation here we come! Seems the $24 billion didn’t counter act the euros given the dollar ended up trading higher and metals dropped a bit. I wonder how the market would have reacted if they failed to do this.
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