Several of the world's central banks have come together to offer commercial banks unlimited dollar loans to give them the cash they need to get through the end of the year.
Banks say they're not getting the dollar loans they need
The markets cheered a European Central Bank (ECB) announcement on Thursday that it would provide its banking sector with unlimited amounts of dollars, working with other major central banks to prevent money markets from freezing up in the wake of Europe's sovereign debt crisis.
"The European Central Bank has decided in coordination with the (US) Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the years," the ECB said.
The ECB will work with several other central banks to keep the commercial banks in business
The move addresses market concerns over access to dollar funding, which has led to a recent slide in banking stocks, especially in France. Shares in the French bank BNP Paribas jumped as much as 22 percent, before ending at 13 percent higher than the previous day's close.
Some banks have found it difficult to obtain dollar funding for more than a few days recently, with traditional dollar lenders nervous about the effect a possible Greek debt default could have on markets throughout the region.
"This is a very welcome decision," Silvio Peruzzo, an economist at the Royal Bank of Scotland, told the news agency Reuters. "Market reaction is strong given the news in recent days that some big banks are struggling to get funding. This eases many funding concerns that there are regarding many European banks."
The euro 'more than a currency'
Even before the announcement, stocks were up after reassuring words from French President Nicolas Sarkozy and German Chancellor Angela Merkel that the eurozone was not planning for Greece's exit from the common currency union or for it to default on its debt. Merkel reiterated her support for the euro on Thursday.
Merkel is fighting for the euro and for European unity
The euro is "worth every effort to solve our central problem today - the debt crisis of individual euro countries," she said at the International Motor Show in Frankfurt.
"The euro is far more than a currency. It is a symbol of our common economic success and it is a symbol of our European unity," she added.
The euro provides for economic growth, it provides for jobs and for prosperity in Germany," she added. "So it is completely clear that Germany, in our own deepest interest, and at the same time as Europe's biggest economy, has a duty and a responsibility to make its contribution to securing the euro's future and strengthening Europe."
Offering a hand
One German doing his part is Horst Reichenbach. He's the head of a new European Commission task force created to help the Greek government push through unpopular reforms that are conditions of further bailout cash from the European Union. Reichenbach told reporters at a press conference in Athens on Thursday that Greek officials seemed "very much aware" of the challenges that lie ahead.
Reichenbach emphasized that he and the task force were there to help, not to inspect, as he attempted to distance his team from the inspectors from the European Commission, the ECB and the International Monetary Fund who many Greeks have come to resent. The task force is in Greece to advise the government, especially when it comes to taxes. They also are looking for EU money unrelated to the bailouts that Greece already has access to but has not taken advantage of.
"There is a ton of money that's available, as strange as that might seem," Reichenbach said. "The problem is how to use it efficiently so that you create growth and new jobs."
Author: Holly Fox (AFP, AP, Reuters)
Editor: Andreas Illmer
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