The European Central Bank (ECB) announced on Sunday a special 38-day loan to provide eurozone banks with more cash in a bid to balance conditions on extremely tense interbank money markets.
The announcement came shortly before the British government announced that it had nationalized a second bank, Bradford and Bingley.
The amount of the ECB operation was not specified, but the central bank said in a statement that it “will continue to steer liquidity towards balanced conditions” in an attempt to bring short term interbank interest rates in line with the bank’s own minimum rate.
“The special term refinancing operation will be renewed at least until beyond the end of the year,” it said.
The comments appeared to be aimed at calming troubled markets which have seen tension increase as the end of the third quarter drew near.
The operation announced yesterday will run until Nov. 7, but is likely to be rolled over if chronic market tension persists.
Commercial banks usually lend and borrow cash on interbank money markets but these have come under severe pressure 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 hundreds of billions of dollars, euros, pounds and other currencies in the form of loans into such markets in order to ease turmoil stemming from the crisis in the US financial sector.
In Britain, the government confirmed that it was nationalizing the troubled bank Bradford and Bingley, the second British bank to be saved in such a fashion after Northern Rock.
Major central banks agreed last week to inject billions more dollars into money markets that have been battered by the chronic crisis.
The focus is on getting banks over the end of quarter period, when they typically seek to beef up their cash holdings.
In December, the ECB, US Federal Reserve and other central bank scrambled to avert a crisis when commercial banks getting set to close out their books for the year sent money market rates soaring.
Some analysts question however, whether the central bank moves will work, saying that commercial banks soak up the extra cash but still do not lend to each other or extend it as credit to businesses.
Rather, they may be using some of the funds to buy government treasury bills because they are presently considered one of the safest investments.
FREEDOM OF NAVIGATION: The UK would continue to reinforce ties with Taiwan ‘in a wide range of areas’ as a part of a ‘strong unofficial relationship,’ a paper said The UK plans to conduct more freedom of navigation operations in the Taiwan Strait and the South China Sea, British Secretary of State for Foreign, Commonwealth and Development Affairs David Lammy told the British House of Commons on Tuesday. British Member of Parliament Desmond Swayne said that the Royal Navy’s HMS Spey had passed through the Taiwan Strait “in pursuit of vital international freedom of navigation in the South China Sea.” Swayne asked Lammy whether he agreed that it was “proper and lawful” to do so, and if the UK would continue to carry out similar operations. Lammy replied “yes” to both questions. The
SECOND SPEECH: All political parties should work together to defend democracy, protect Taiwan and resist the CCP, despite their differences, the president said President William Lai (賴清德) yesterday discussed how pro-Taiwan and pro-Republic of China (ROC) groups can agree to maintain solidarity on the issue of protecting Taiwan and resisting the Chinese Communist Party (CCP). The talk, delivered last night at Taoyuan’s Hakka Youth Association, was the second in a series of 10 that Lai is scheduled to give across Taiwan. Citing Taiwanese democracy pioneer Chiang Wei-shui’s (蔣渭水) slogan that solidarity brings strength, Lai said it was a call for political parties to find consensus amid disagreements on behalf of bettering the nation. All political parties should work together to defend democracy, protect Taiwan and resist
By refusing to agree spending increases to appease US President Donald Trump, Spanish Prime Minister Pedro Sanchez threatened to derail a summit that NATO Secretary-General Mark Rutte needs to run smoothly for the sake of the military alliance’s future survival. Ahead of yesterday’s gathering in The Hague, Netherlands, things were going off the rails. European officials have expressed irritation at the spoiler role that Sanchez is playing when their No. 1 task is to line up behind a pledge to raise defense spending to 5 percent of GDP. Rutte needed to keep Spain in line while preventing others such as Slovakia
SHIFT PRIORITIES: The US should first help Taiwan respond to actions China is already taking, instead of focusing too heavily on deterring a large-scale invasion, an expert said US Air Force leaders on Thursday voiced concerns about the Chinese People’s Liberation Army’s (PLA) missile capabilities and its development of a “kill web,” and said that the US Department of Defense’s budget request for next year prioritizes bolstering defenses in the Indo-Pacific region due to the increasing threat posed by China. US experts said that a full-scale Chinese invasion of Taiwan is risky and unlikely, with Beijing more likely to pursue coercive tactics such as political warfare or blockades to achieve its goals. Senior air force and US Space Force leaders, including US Secretary of the Air Force Troy Meink and
RSS