<P> On August 9 , 2007 , BNP Paribas announced that it could not fairly value the underlying assets in three funds because of its exposure to U.S. subprime mortgage lending markets . Faced with potentially massive ( though unquantifiable ) exposure , the European Central Bank ( ECB ) immediately stepped in to ease market worries by opening lines of € 96.8 billion ( U.S. $130 billion ) of low - interest credit . One day after the financial panic about a credit crunch had swept through Europe , the U.S. Federal Reserve Bank conducted an `` open market operation '' to inject U.S. $38 billion in temporary reserves into the system to help overcome the ill effects of a spreading credit crunch , on top of a similar move the previous day . In order to further ease the credit crunch in the U.S. credit market , at 8 : 15 a.m. on August 17 , 2007 , the chairman of the Federal Reserve Bank Ben Bernanke decided to lower the discount window rate , which is the lending rate between banks and the Federal Reserve Bank , by 50 basis points to 5.75 % from 6.25 % . The Federal Reserve Bank stated that the recent turmoil in the U.S. financial markets had raised the risk of an economic downturn . </P>
<P> On August 9 , 2007 , BNP Paribas announced that it could not fairly value the underlying assets in three funds because of its exposure to U.S. subprime mortgage lending markets . Faced with potentially massive ( though unquantifiable ) exposure , the European Central Bank ( ECB ) immediately stepped in to ease market worries by opening lines of € 96.8 billion ( U.S. $130 billion ) of low - interest credit . One day after the financial panic about a credit crunch had swept through Europe , the U.S. Federal Reserve Bank conducted an `` open market operation '' to inject U.S. $38 billion in temporary reserves into the system to help overcome the ill effects of a spreading credit crunch , on top of a similar move the previous day . In order to further ease the credit crunch in the U.S. credit market , at 8 : 15 a.m. on August 17 , 2007 , the chairman of the Federal Reserve Bank Ben Bernanke decided to lower the discount window rate , which is the lending rate between banks and the Federal Reserve Bank , by 50 basis points to 5.75 % from 6.25 % . The Federal Reserve Bank stated that the recent turmoil in the U.S. financial markets had raised the risk of an economic downturn . </P>
how did the us housing bubble affect europe
how did the us housing bubble affect europe
opening lines of € 96.8 billion ( U.S. $130 billion ) of low - interest credit
opening lines of € 96.8 billion ( U.S. $130 billion ) of low - interest credit