By JOELLEN PERRY in Frankfurt and CARRICK MOLLENKAMP in London
With European banks stockpiling cash and wary of lending to each other for periods longer than a week, the European Central Bank pumped €75 billion, or about $104 billion, in three-month credit into money markets yesterday in another effort to bring dealings back to normal.
The extra longer-term funding, the second such maneuver in nearly three weeks, was in addition to the ECB's routine injections of three-month funds and contrasted with the shorter-term funds the ECB has also been providing to the market.
The operation was exactly what European commercial banks say they have been seeking in discussions with the ECB over the past week or so. Like most central banks, the ECB is in constant contact with commercial banks.
Still, three-month euro interbank offered interest rates continue hovering around 4.75%, their highest levels since May 2001 and well above the ECB's target lending rate for overnight funds of 4%. Usually, the gap is smaller....MORE from the Wall Street Journal Online