Banks favour Frankfurt for dollar auctions

Results of the European Central Bank's (ECB) and Bank of England's dollar auctions indicate the Frankfurt-based institution's operations are attracting more bids because of its more lenient collateral rules.

Both the ECB and the Bank have offered $40 billion in overnight dollar-denominated funds each working day since last Thursday after costs for overnight dollar loans in the interbank market surged in the wake of the collapse of Lehman Brothers, an investment bank.

The results of Monday's a

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