The European Central Bank invited euro-area banks to place orders for a second tranche of unlimited three-year loans.
The Frankfurt-based ECB will lend banks as much cash as they want against eligible collateral for 1,092 days at the average of its benchmark rate -- currently at a record low of 1 percent -- over the period of the loan. Economists expect banks to ask for 470 billion euros ($634 billion), according to the median of 28 forecasts in a Bloomberg News survey. Bids must be submitted by 9:30 a.m. tomorrow, with results announced around 11:15 a.m. The loans start on March 1.
The ECB allotted a record 489 billion euros in its first three-year loan in December, fueling a bond-market rally and pushing down borrowing costs for Europe’s most indebted nations. ECB Governing Council member Ewald Nowotny said today that the second loan should have a “more direct effect for the real economy.”
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