Banks snap up ECB’s €530bn

Banks have grabbed €530bn at the European Central Bank’s second offering of cheap three-year funds, fuelling expectations that credit will flow to businesses and borrowing costs will ease for governments hit by the eurozone crisis.

In the space of two months, the ECB has now injected more than€1tn euro into the financial system, banishing the threat of a credit crunch.

A total of 800 banks borrowed money at the tender, with demand exceeding the €500bn expected by traders and the €489bn allotted in the first operation in December.