The European Central Bank allotted €489.19bn in the first of two keenly-awaited three-year refinancing operations Wednesday, beating market expectations in a sign that banks expect other sources of funding to remain tight through 2012. The result will fuel hopes that banks might use the funds to prop up eurozone sovereign bond markets.

The ECB said it allotted the three-year loans--the longest maturity ever offered by the central bank--to 523 banks.