The Euro and stock markets were steady as the European Central Bank (ECB) loaned banks £107.7 billion which was below the expected high amount by over £2 billion.
This level of lending was viewed by economists as a test of the bank sector’s health. With the news the euro rose nearly a cent against the sterling.
According to the ECB 171 banks borrowed funds at a flat rate of 1 per cent. Banks in Greece, Spain, and Portugal have become more increasingly dependent on the ECB due to failing economies. Though the £107.7 billion was less than what had been projected it was still the highest ever borrowed in the three-month auction. Had the demand for funds been higher it would have been seen as a warning since the ECB charges a higher interest rate as compared to market rates.
The FTSE 100 was showing a 18.21 per cent increase at 4,932.43 as the day neared closing.