European Banks Loaned $640B

The European Central Bank pumped €490 billion, or $640 billion, into the continent’s troubled banks, hoping to free up credit tightened by the euro zone’s debt crisis. Statistics from the ECB showed that 523 lenders signed up for the three-year loans, which come at only 1 percent interest and are the ECB’s largest infusion of cash since the common currency was created in 1999. The ECB’s willingness to make this money available showed its commitment to making sure banks pay off their loans, which is considered essential for European recovery to start in 2012. But while markets were briefly cheered on the news, stocks fell Wednesday as many worried the banks wouldn’t use the money to buy bad debts and ease the debt crunch.