The European Central Bank may announce a range of measurestomorrow to stimulate bank lending, said three euro-area officialswith knowledge of policy makers' deliberations.

Options on the table include loosening collateral criteria sothat institutions have more access to cheap ECB cash and offeringthem longer-term loans to grease the flow of credit to the economy,said the officials, who spoke on condition of anonymity because thediscussions are private. Two said an interest rate cut is likely,with only the size of the reduction to be determined for themonthly decision tomorrow.

The ECB is focusing on getting banks lending again rather thanincreasing its government bond purchases to fight Europe's debtcrisis. The central bank's insistence that governments takemeasures to restore investor confidence appears to have paiddividends, with Italian and Spanish yields plunging after Germanyand France agreed to move the 17-nation euro area toward a fiscalunion.

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