European Central Bank Holds Rates Steady

Updated from 7:52 a.m. EDT

BERLIN -- The European Central Bank is offering new emergency loans to banks to help steady a eurozone financial system that is being shaken by uncertainty over the government debt crisis.

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Bank President Jean-Claude Trichet said Thursday the ECB would offer an unlimited amount of 12-month and 13-month credits. That will provide banks financing for a longer period.Many European banks are exposed to losses to Greek debt. That has made borrowing between banks, crucial for their daily functioning, increasingly difficult because of fears the money might not get repaid.Trichet also said the bank would buy up to €40 billion ($53 billion) in covered bonds, a type of security used by banks to raise funding. The ECB's presence will help free up that market and make borrowing easier for banks.Earlier Thursday, the ECB left interest rates unchanged.

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