ECB pumps more than $93 billion into money markets

FRANKFURT: The European Central Bank said on Friday it had pumped more than 93 billion dollars (69 billion euros) into interbank money markets to get banks through the weekend, a bit less than expected.

The operation has become a daily event aimed at keeping cash flowing through the key financial pipeline on which commercial banks normally trade credit among themselves but which are now on life-support from central banks.

The amount lent on Friday, 93.878 billion dollars, was less than the 100 billion dollars on offer, and banks paid an average of 4.85 percent for the four-day loans, down from 9.44 percent during a similar one-day operation on Thursday, when commercial banks had sought a total of 116 billion euros.

By raising on Thursday to 100 million dollars the amount on offer to eurozone banks, the ECB took another step in a global effort to calm heightened tension on the crucial financial markets.

On Wednesday, the ECB and several other central banks announced exceptional coordinated interest rate cuts to help fight a tenacious international financial crisis.

The money markets determine the availability of credit for vast numbers of people around the globe, from managers trying to fund their businesses to families and students seeking personal loans.

Commercial banks generally lend and borrow cash from each other on interbank markets but these have dried up since the US market for high-risk, or subprime, mortgages collapsed more than a year ago.

The ECB and other major central banks have been pumping huge amounts of cash in the form of loans to ease turmoil stemming from the latest crisis in the US financial sector, after the investment bank Lehman Brothers went bankrupt last month.