The European Central Bank will lend euro-area banks a recordamount for three years in its latest attempt to keep credit flowingto the economy during the sovereign debt crisis.

The Frankfurt-based ECB awarded 489 billion euros ($645 billion)in 1,134-day loans today, the most ever in a single operation andmore than economists' median estimate of 293 billion euros in aBloomberg News survey. The ECB said 523 banks asked for the funds,which will be lent at the average of its benchmark interest rate —currently 1 percent — over the period of the loans. They starttomorrow.

“It was obviously an offer the banks could not refuse,” saidLaurent Fransolet, head of fixed-income strategy at BarclaysCapital in London. “It shows the ECB is not out of ammunition andit gives banks security on liquidity for a few years. On the otherhand it means banks will rely on the ECB for longer.”

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