The city of Frankfurt, seat of the European Central Bank (ECB)(pictured), the Frankfurt stock exchange and several large banks, is the financial centre of Germany. (Ralph Orlowski/Getty Images)

AMSTERDAM -- On Wednesday, the European Central Bank (ECB) announced a loan of 442.2 billion Euros to more than a thousand commercial banks across Europe. The loans will be taken out for a period of twelve months at a historically low interest rate of one percent.

By providing these long term loans at low interest rates, the ECB hopes to provide the European Banks with enough reserves to restore trust, and to prompt European banks to loan money to each other and their customers.

It is the first time that banks have been able to sign up without limit for long term loans at an interest rate of one percent only.