ECB loans show illiquidity in longer-term lending

The results of this month's European Central Bank (ECB) three-month open market operation reveal liquidity tensions remain for longer-term interbank lending.

The average allotment rate - which represents the average cost charged for borrowing from the ECB in this particular tender - was 4.61%, 61 basis points higher than the central bank's benchmark rate.

A spokesperson for the ECB told Central Bank News that the average allotment rates in June and July, before the credit crunch struck, were