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ECB pumps in record 442bn to boost Eurozone lending

<div>THE European Central Bank (ECB) pumped a record &euro;442bn (&pound;375bn) into money markets yesterday for 12 months in an attempt to improve bank lending and drag the Eurozone economy out of recession.<br /><br />A record 1,121 banks scrambled to take up the ECB&rsquo;s offer of unlimited funds at a fixed rate of one per cent, as they anticipated that they would not see such a cheap offer again.<br /><br />The loan is the central bank&rsquo;s first ever money market operation with a term as long as one year and represents five per cent of the Eurozone economic output.<br /><br />As expected, the injection of funds put downward pressure on short-dated money market rates.<br /><br />Yesterday the euro interbank offered rate (Euribor) for 12-month loans fell to 1.57 per cent &ndash; a record low.<br /><br />The ECB is hoping banks will feel confident enough to start lending again and European stocks rallied on the hope that some of the injected liquidity would work through into equities investment.<br /><br />But Daniele Antonucci at Capital Economics, said: &ldquo;The injection of funds will not necessarily translate into broader lending by banks.&rdquo;&nbsp;</div>