Bank chief backs eurozone boost
Bank of England governor Sir Mervyn King said a scheme that injected an additional 529.5bn euros (£448.7bn) into the European economy had helped avoid a run on the region’s banks.
The European Central Bank yesterday dished out cheap three-year loans to 800 banks, which in addition to a £414.4bn injection in December means it has now primed the banks with nearly £900m.
The long term refinancing operation has been widely praised for helping to avert another financial crisis in Europe and Sir Mervyn told MPs it had helped banks to avoid a run, particularly on those in the southern area.
European banks have mainly used the money to buy government bonds, reducing borrowing costs for many eurozone nations.