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EU banks grabbing up ECB loans

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This is a program that was supposed to be valued at around 300 million euros, so those watching are a bit nervous since the number now is closer to 500 million euros. It's great that the banks are going to be in better shape with the loans but after what we watched in the US with similar lending, the banks did little to help anyone other than themselves. Rather than lending to outside business, they often were lending to themselves to buy commodities and jacked up a lot of prices and profits in the process. It's an industry that doesn't know how to behave so let's hope this lending works out better than the US program.

Banks gobbled up nearly 490 billion euros in three-year cut-price loans from the European Central Bank on Wednesday, easing immediate fears of a credit crunch but leaving unresolved how much will flow to needy euro zone economies. Following a string of failed attempts by euro zone leaders to thwart market attacks on the bloc's weaker members, hopes of crisis relief before the year-end had been pinned on a massive uptake of the ECB's ultra-long and ultra-cheap loans. The near half a trillion euro take-up of ECB funds exceeded almost all forecasts. A total of 523 banks borrowed with demand way above the 310 billion euros expected by traders polled by Reuters, making it the most the bank has ever pumped into the financial system.

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