FRANKFURT, Germany - The European Central Bank loaned a massive 489 billion euros ($639 billion) to 523 banks for an exceptionally long period of three years in an effort to steady a financial system under pressure from the eurozone debt crisis.
It was the biggest ECB infusion of credit into the banking system in the euro's 13 year history.
The loans surpassed the 442 billion in one-year loans from June, 2009, when the financial system was struggling after the collapse of U.S. investment bank Lehman Brothers.
The ECB is trying to make sure that banks have enough ready cash to operate and keep on loaning to businesses so that a credit crunch does not choke off economic growth. Many economists think the eurozone may be headed for at least a mild recession in coming months.
Slowing growth would make it even harder for the over-indebted governments such as Italy that are at the heart of the eurozone's crisis to get a handle on their debt burdens. A government default could cause a new financial crisis and send the global economy into recession.
The 37-month term of the loans permits the banks to get the money they need to pay off large amounts of their own maturing debts in the first part of the new year.
The concern has been that if they cannot borrow to meet those obligations they will cut back on the loans that businesses need to operate day to day, expand their operations and hire people.
The ECB has served as lender of last resort for banks when they cannot borrow elsewhere. ECB president Mario Draghi has stressed the central bank's role in supporting banks even as the bank has refused to play that role for the indebted governments themselves by buying large amounts of their bonds.
