Sept. 29 (Bloomberg) -- The European Central Bank said it will make additional funds available to banks through the end of the year in ``special'' auctions to ease tensions on euro-region money markets.

The Frankfurt-based ECB said it will loan banks extra cash today for 38 days. ``The special term refinancing operation will be renewed at least until beyond the end of the year,'' it said in a statement. Bids must be submitted by 1 p.m. Frankfurt time.

The world's largest central banks are injecting liquidity into money markets as more than $550 billion in writedowns and losses tied to the U.S. mortgage market prompt banks to stockpile cash to meet their own funding needs. The U.S. government may spend up to $700 billion to rescue the financial industry.

Commercial banks deposited a record 28.1 billion euros ($40.2 billion) with the ECB overnight on Friday.

The ECB said it will continue ``to steer liquidity towards balanced conditions in a way which is consistent with its objective to keep very short-term rates close to the minimum bid rate'' of 4.25 percent.

Today's auction will be conducted at a variable rate with no pre-set amount, the ECB said. The loan will be settled tomorrow and mature on Nov. 7.

To contact the reporter on this story: Simone Meier in Frankfurt at smeier@bloomberg.net

Last Updated: September 29, 2008 04:40 EDT