ECB, BOE Pump Extra Cash Into Money Markets

In the wake of a Lehman bankruptcy, a sale of Merrill and a request by AIG for $40 billion from the Fed,the ECB and BOE pumped extra cash into money markets this morning.

With interest rates on the overnight loans that euro-zone banks make to one another climbing, the ECB early Monday injected €30 billion (US$42.65 billion) in extra overnight funds into markets. The Bank of England pumped £5 billion (US$9.87 billion) in extra three-day funds. The Swiss central bank said it would take similar steps if necessary.

The ECB issued a statement early Monday morning saying it "stands ready to contribute to orderly market conditions." The Bank of England said its action was "being taken in response to conditions in the short-term money markets this morning."

-EPJ Newsdesk