FRANKFURT/LONDON, Jan 13 (Reuters) – Euro-priced
interbank rates hit new 9-1/2 month lows on Friday driven by the
excess cash in the banking system but banks worried about
lending to their peers are still parking record amounts of cash
with the ECB.

News in the European afternoon that credit rating agency
Standard & Poor’s was set to downgrade several euro zone
countries kept markets on edge.

FRANKFURT (Reuters) – The European Central Bank said on Thursday its flood of cheap 3-year loans is helping banks and supporting morale across the euro zone, but it still left the door open to further interest rates cuts.

It also said the bloc’s economy was showing some signs of stabilisation in activity deep down, although it faced risks.

FRANKFURT (Reuters) – The dangers facing Europe’s financial system have continued to worsen, Europe’s recently created super-watchdog, the European System Risk Board (ESRB), said on Thursday, as it urged the euro zone to get its new rescue fund up and running.

The body, designed to give early warnings and one of Europe’s flagship responses to the financial crisis, said the trouble in the euro zone bond markets and the lack of confidence in Europe’s banks had made the risks facing the region more acute.

FRANKFURT (Reuters) – Europe’s lenders almost halved their intake of European Central Bank one-week refinancing money on Tuesday as they geared up to take full advantage of the ECB’s first ever injection of unlimited and ultra-cheap three-year funding.

Banks have the first of two opportunities to get three-year money this week, with allotment announced on Wednesday.

FRANKFURT, Dec 19 (Reuters) – The European Central
Bank warned on Monday risks to financial stability in the euro
zone have increased considerably in the second half of this
year, pointing most prominently to concern about growing
contagion effects from the debt crisis, and bank funding
strains.

The 17-country bloc’s central bank said that, in the worst
case, there could be a return to a global recession, which in
turn would hit the already-weak banks. It said the risk of two
large banks defaulting withing the next year had risen to the
highest level in the measure’s four-year history.

FRANKFURT (Reuters) – The European Central Bank doused hopes on Thursday it will ramp up its bond-buying program to fight the bloc’s debt crisis, unnerving markets hours before a high-stakes EU summit they had hoped would produce a ‘grand bargain’ to end the turmoil.

The ECB cut rates to a record low of 1.0 percent, offered ultra-long 3-year financing to banks and eased rules on the collateral it requires from banks to tap its funds.

FRANKFURT/MARSEILLE, France (Reuters) – The European Central Bank acted to soften a looming recession and avert a credit crunch in the debt-plagued euro zone by cutting interest rates on Thursday as European Union leaders prepared for a crucial summit.

The ECB cut its main rate by a quarter-point to a record low 1.0 percent as anxiety over the worsening sovereign debt crisis drowned out concern about above-target inflation.

FRANKFURT (Reuters) – The European Central Bank is likely to cut interest rates on Thursday and offer ultra-long liquidity operations to support banks, while leaving the door open to further measures to fight Europe’s debt crisis if governments agree fiscal reforms.

A Reuters survey of 73 analysts showed a 60-percent chance the ECB will cut rates by 25 basis points to a record low of 1.0 percent — a floor it previously reached during the financial crisis in 2009. It cut rates by a similar amount in November.

PARIS/BERLIN (Reuters) – French President Nicholas Sarkozy has embraced a German campaign for treaty change that could give European authorities intrusive powers to intervene in the national budgets of countries sharing the euro currency.

France and Germany will soon propose amendments to the European Union treaty in response to the bloc’s sovereign debt crisis, Sarkozy said on Tuesday.