Banks ready to snap up 500bn in ECB loans

Struggling banks are set to tap the European Central Bank for up to 500 billion (£418 billion) in its first-ever auction of emergency
three-year loans, City experts said today.

ECB president Mario Draghi announced the latest initiative for the eurozone's ailing banks two weeks ago, as the central bank slashed interest rates to 1%.

Banks will be able to borrow the long-term cash at 1%, and pay the money back after a year if they choose.

Citigroup's Juergen Michels said bank borrowing from the ECB would be "probably in the range between 400 billion and 500 billion".

Barclays Capital's Laurent Fransolet added he expected a "big take-up", saying: "It is a reflection of the challenges that are out there."
European talks yesterday drew commitments to
150 billion in IMF loans to tackle the debt crisis, short of the 200 billion hoped for.

IMF chief Christine Lagarde warned on a trip to Africa today the world economy was at "a dangerous juncture" due to Europe's woes.