Thursday, August 09, 2007

Absence of liquidity = free?

 Brother can you spare a dime?  How about $130.2 billion then?

The European Central Bank, in an unprecedented response to a sudden demand for cash from banks, loaned 94.8 billion euros ($130.2 billion). Overnight lending rates banks charge each other jumped to the highest in six years. The London interbank offered rate in dollars rose to 5.86 percent today from 5.35 percent and in euros gained to 4.31 percent from 4.11 percent.

`Sign of Panic'

``Today's step by the ECB looks like a sign of panic,'' said Sergi Martin, who helps oversee $9.6 billion at Credit Andorra in Andorra. ``We might see more of this in the coming days.''

Source: Europe

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