The European Central Bank (ECB) said on Tuesday it would lend more than 334 billion euros (US$425 billion) during a regular weekly operation that underscored strong demand from eurozone banks.
A total of 848 banks requested the funds, the first to be lent at the ECB’s new benchmark rate of 3.25 percent following a half percentage point interest rate cut on Thursday last week.
The ECB satisfied all requests for one-week loans and was to disburse yesterday a total of 334.413 billion euros, it said in a statement.
It had estimated that banks needed 222.5 billion euros for the week to underpin lending operations, and the sharply higher amount indicated that banks were maintaining strong cash balances amid uncertainty generated by the international banking crisis.
“Banks are safeguarding their balance sheets to such an extent that they are now very reluctant to lend just when households and enterprises need credit to tidy them over some rough times,” Bank of America senior economist Holger Schmieding said.
The situation appears to be creating some frustration at the ECB, and its president Jean-Claude Trichet has pressed commercial banks to assume their responsibilities as purveyors of credit to the wider economy.
“It’s not a normal functioning, clearly that you have a lot of supply of liquidity which at the end of the day is in our deposit window,” Trichet acknowledged after the ECB announced its interest rate cuts.
Earlier on Tuesday, the ECB said that more than 209 billion euros were parked in its overnight deposit facility, which offers a rate of 3.25 percent, well below the going interbank market rate of 4.15 percent. That was a clear sign banks would rather lend money to the ECB, even at a lower rate of return, than to other banks amid prevailing market mistrust.
The ECB identified a large amount of excess cash in eurozone money markets and moved on Tuesday to mop it up with what it calls a fine-tuning operation.
The ECB’s forecasts “show that a large positive liquidity imbalance is expected” on the last day of period during which commercial banks must maintain minimum reserves.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique