European Banks Pay to Lend Cash in Credit-Crunch Reversal

Six years ago, euro-area banks were unwilling to lend to their peers because they didn’t trust them to stay in business long enough to return the cash. Now, for the first time, they are prepared to pay for the privilege for a month.

The rate at which the region’s banks say they see each other lending in euros for one month dropped below zero today, according to the European Money Markets Institute. That’s a turnaround from September 2008, when the rate climbed to a record 5.197 percent as Lehman Brothers Holdings Inc.’s collapse triggered a global recession and froze capital markets.