European Central Bank

The European Central Bank is looking at extending the term of loans it offers banks to two or even three years to try to prevent the euro zone crisis precipitating a credit crunch that chokes the blocs economy, people familiar with the matter said.According to Reuters, the ECB is examining this unprecedented possibility as intensifying fears about the euro zone succumbing to its debt crisis hurt the inter-bank money market, with banks scaling down the list of peers to which they are ready to lend.The central bank is looking into offering banks liquidity over a two-year or even three-year horizon, the sources said, aiming to free up the increasingly blocked inter-bank money market and give banks more leeway to buy and hold sovereign bonds.
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