Αssociated Press reports from Frankfurt in Germany that the European Central Bank has handed out 1.31 trillion euros ($1.46 trillion) in long-term, ultra-cheap credit to hundreds of banks as part of its emergency support aimed at cushioning the impact of the coronavirus pandemic on businesses and workers.
The three-year loans are aimed at making sure banks can keep lending to enterprises so they don’t run out of money and go out of business during the crisis. That would cause a cascading loss of jobs and income and hurt the long-term recovery from the severe interruptions to business due to the measures aimed at limiting the spread of the virus.
The ECB announced Thursday that 742 banks across the 19 countries that use the euro currency took up the credit offer, which can carry a negative interest rate of as low as minus 1.0% so long as banks keep up their lending to businesses. That means banks are getting paid by the ECB to borrow the money, an offer that many found hard to refuse. The ECB cut the rate on the offer from minus 0.5% at its April 30 meeting as the virus lockdowns slammed the European economy.
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