FT.com / Home UK / UK - Markets stunnedby ECB move

FT.com / Home UK / UK - Markets stunnedby ECB move: "Markets stunnedby ECB move Published: August 10 2007 03:00 | Last updated: August 10 2007 03:00 The European Central Bank stunned markets yesterday with its aggressive intervention to quash a brewing liquidity crisis in European financial markets. The ECB move far exceeded in scale and scope the relatively modest steps taken by the Federal Reserve to sustain adequate liquidity in US markets. After noting a sharp rise in overnight interest rates to 4.7 per cent - far above the target 4 per cent - the ECB put out a statement in the morning saying it stood 'ready to assure orderly conditions in the euro money market'. Within a couple of hours it acted: taking the unprecedented step of offering a pre-announced unlimited tender so that European banks could get as much cash as they wanted. The last time it stepped in to provide large-scale liquidity in response to market concerns was in the aftermath of the September 11 terrorist attacks. But even then, it did not offer unlimited support. Equally striking was the amount of money the 49 banks that took up the tender received: €94.8bn ($129bn). This was far above the €69bn banks took on September 12 and the €40bn the next day. By contrast, the Federal Reserve - which also saw overnight rates move up to above 5.75 per cent, compared with its "