BUSINESS
09/21/2011 08:19 EDT | Updated 11/21/2011 05:12 EST

Banking system fears stirred again by $500 million loan to mystery bank

FRANKFURT - The European Central Bank says it loaned $500 million to a single bank for seven days, raising further fears that a major financial institution could be in trouble.

The bank said Wednesday on its website that it would make the loan to a single unidentified bidder from its swap line through which it obtains dollars from the U.S. Federal Reserve.

Europe's sovereign debt crisis has provoked fears about the health of the banking system because of the potential for losses from holdings of bonds issued by Greece and other troubled countries.

Some banks are unable to borrow normally from other banks because of fears they will not pay the money back, leaving them dependent on last resort credit from the ECB.