• 09 OCT 2011
By Laura Noonan , in Berlin | Irish Independent (ECB eases lending rules in bid to halt new crisis
THE European Central Bank is reinstating two of its most powerful financial market interventions in a bid to prevent the latest eurozone woes from spiralling into another fully blown banking crisis.
ECB president Jean Claude Trichet revealed the exceptional measures yesterday, as he hosted a press conference after the last governing council meeting of his eight-year reign at the bank.
One of the supports will see the ECB offering banks unlimited 12-month loans in October and 13-months loans in December, giving banks greater certainty than the 90-day money usually on offer.
The second scheme will see the ECB spend €40bn buying bank bonds in primary and secondary markets by October 2012, a measure that should reduce the banks' costs of issuing bonds.
The ECB also promised to maintain its shorter-term "main" lending operations at full allotment, or unlimited money at a fixed rate, until mid July at the earliest.
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