European Central Bank's lending to financial institutions surged to a record as it pumped extra cash into the banking system

European Central Bank's lending to financial institutions surged to a record as it pumped extra cash into the banking system to ease a funding gridlock. The Frankfurt-based central bank said its outstanding euro loans to banks rose to 773.7 billion euros ($1.01 trillion) yesterday, the largest amount ever, from 753.1 billion euros a day earlier. The figure does not include the ECB's dollar loans. Lending between banks ran dry after Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, shattering confidence among lenders and sending borrowing costs to records. Money- market rates in London are falling after governments bailed out banks and policy makers intensified efforts to encourage lending with cash injections. The ECB has also signaled it's ready to follow its emergency interest-rate cut on Oct. 8 with another reduction next week.