FYI...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaYm942OQDic&refer=home
ECB Injects Cash for Third Day to Avert Credit Crunch (Update5)
Aug. 13 (Bloomberg) -- The European Central Bank added emergency funds to the banking system for a third trading day and said money markets are returning to normal.
The ECB loaned 47.7 billion euros ($65 billion) to banks, down from 61.05 billion euros on Aug. 10. The Frankfurt-based central bank said it ``notes that money market conditions are normalizing and that the supply of aggregate liquidity is ample.''
The ECB, the U.S. Federal Reserve and other central banks injected $154 billion into money markets on Aug. 9 and $135.7 billion on Aug. 10 amid concern that U.S. subprime mortgage losses will curtail lending. Central banks in Japan and Australia, which joined the ECB and the Fed in pumping cash into their markets last week, today refrained from providing additional funds.
The overnight rate at which banks lend euros to each other fell to 4.03 percent from as high as 4.16 percent earlier today. It spiked to 4.62 percent on Aug. 9, a six-year high. The ECB's benchmark refinancing rate is 4 percent.
``The situation is gradually normalizing,'' said Jose Luis Alzola, director of economic and market analysis at Citigroup Global Markets in London. ``However, fears will subside gradually rather than quickly.''
Stocks rallied worldwide and U.S. index futures advanced after central banks moved to ease concern about tighter credit. European stocks rose for the first time in three days and Asian stock markets rebounded today from their biggest drop in five months.
Central banks in South Korea, the Philippines, Singapore, Indonesia, India, and Malaysia have said they were prepared to add cash into their systems if required. The Reserve Bank of New Zealand today said it was ``business as usual'' in its conduct of daily operations.
The International Monetary Fund said last week that ``prompt action'' by central banks to add cash to the banking system should help avert a crisis in credit markets.
``Looking forward, while the situation is still evolving, we continue to believe that the systemic consequences of the re- assessment of credit risk that is taking place will be manageable,'' the IMF said.