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pan, the Bank of England, the Bank gian bank and insurer Fortis NV and banks no longer trust each other, the ECB’s main policy rate of 4.25%.
Goal is to improve of Canada, the National Bank of Den- the U.K.’s Bradford & Bingley PLC they would rather park funds at the But the three-month Euribor
mark, Norges Bank of Norway, the all needed government-orches- central bank at a lower rate than rate—a benchmark for interbank
liquidity of dollar
is key to seamless services
Reserve Bank of Australia, the Riks- trated emergency funding. In the lend to other banks at a higher rate. trading—rose to 5.237% from
bank of Sweden and the Swiss Na- U.S., Citigroup Inc. agreed to ac- “With financial markets experi- 5.142% Friday, because the funds
around the globe tional Bank. quire Wachovia Corp.’s banking op- encing a serious risk of seizure and will cover the critical year-end pe-
The move will allow interna- erations in another deal backed by the real economy continuing to lose riod. Other longer-dated Euribor
By Nina Koeppen tional central banks to increase vol- the U.S. government. momentum, we think that the out- rates increased in tandem at Mon-
And Terence Roth umes of dollar-denominated lend- As the outlook darkened, inter- look is getting gloomier by the day,” day’s fixing.
Internet-savvy consumers ing to their banking systems for one- bank rates—rates at which banks said Aurelio Maccario, chief euro- Earlier Monday, the Reserve
FRANKFURT—Central banks on week periods. It is aimed at keeping borrow funding from each other— zone economist at UniCredit. Bank of Australia pumped cash into
are forcing electronic Monday added $330 billion to the banks liquid amid a shortage of dol- nudged higher in longer-dated euro “Financial conditions keep tight- its banking system to stave off
funds they can pump into money lars in interbank money markets. funds, indicating that banks were ening and the massive liquidity in- end-of-quarter and end-of-financial-
technology companies markets as more financial institu- “The increase in the amount of still hoarding cash amid percep- jections guaranteed by the ECB have year liquidity pressures as the glo-
to put people back into tions ran into trouble in Europe and foreign exchange swap authoriza- tions that other banks also are at done little to alleviate the problem,” bal financial crisis continued. The
the U.S. tion limits will enable many central risk of default. he said. central bank injected a net 3.14 bil-
the equation The U.S. Federal Reserve said it banks to increase the amount of dol- One or more banks borrowed a to- But the ECB at least provided lion Australian dollars (US$2.61 bil-
boosted its currency-swap facility, lar funding that they can provide in tal of Œ6.788 billion ($9.92 billion) some short-term relief: A special lion) after estimating a surplus of
By Peggy Anne Salz which lets foreign central banks their home markets,” the Fed said in overnight from the ECB at a penalty provision of Œ120 billion in 38-day A$424 million for the day and then
pump dollars into their cash- its statement. “This should help to rate of 5.25%, data from the ECB euro funds helped damp overnight adding an extra A$2.72 billion in its
IGITAL convergence used