European Central Bank provided more cash Tuesday for banks that have been clamoring for money, injecting EUR275 billion (US$370.6 billion) in its normal weekly refinancing as it took further steps from its emergency moves in the last two weeks.
The Bank of England, meanwhile, said it lent 314 million pounds (EUR461.8 million; US$622.3 million) directly to an institution - the first time its emergency loan process had been used since the start of the subprime crisis and the resulting credit crunch.
Central banks worldwide have injected billions of dollars into money markets this month in efforts to calm nervous investors.
Earlier Monday, the Bank of Japan lent another 800 billion yen (EUR5.2 billion; US$7.01 billion), coming on the heels of a 1 trillion injection (EUR6.46 billion; US$8.71 billion) the day before. The Reserve Bank of Australia injected 4.57 billion Australian dollars (EUR2.7 billion; US$3.64 billion), on Tuesday as well, after the U.S. Federal Reserve said Monday it had injected another US$3.5 billion (EUR2.6 billion) into the banking system.
The ECB, which had pumped more than EUR211 billion (US$284.34 billion) into the markets, said Tuesday its weekly allotment was about EUR46 billion (US$61.9 billion) more than it had estimated, in part because banks in the euro zone are still seeking to acquire extra cash.
Despite that, the amount was significantly lower than the ECB's similar tender last week, when it lent EUR310 billion (US$417.7 billion), and below the EUR292.5 billion (US$393.5 billion) it lent the week before.
The Bank of England said an institution it did not identify approached it to tap the standing facility, which had last been used on July 17, when an anonymous financial institution tapped the bank for 109 million pounds (EUR160.3 million; US$216.02 million). The standing facility uses a penalty interest rate, or 1 percent above the benchmark interest rate of 5.75 percent.
The credit crunch started with rising defaults in U.S. subprime mortgages, or home loans made to people with weak credit histories. It spread because banks that held those loans repackaged them and sold them on to others.
The effects have been felt in Europe, especially in Germany, where state-owned wholesale bank Landesbank Sachsen has said it would need a EUR17.3 billion (US$23.31 billion) credit line from other banks to help it counter risks from its exposure to the U.S. subprime credit business.
That exposure - along with the troubles IKB Industriebank AG, which came under the aegis of a several banks to help protect its EUR8.1 billion (US$10.92 billion) exposure to U.S. subprime mortgage securities - has riled investors and markets.
Alexander Stuhlmann, the chief executive of German state-owned bank WestLB AG, warned Monday that German banks could find it harder to secure foreign credit.
"We sense a reluctance on the part of foreign partners to extend credit to German banks," he told reporters.
After WWII, the Soviet army left Austria, and the latter had always remained a neutral state and never joined NATO
Russia experienced default on August 17, 1998. Today, 20 years after those events, the economic situation in Russia does not seem stable to many