By ELLEN SIMON, AP Business Writer
NEW YORK - The Federal Reserve, working with central banks in Europe, Canada and Asia, pumped as much as $180 billion into money markets on Thursday to combat a seizing up of lending between banks that is intensifying global financial crisis.
The Fed also authorized increases in the existing swap lines with the European Central Bank, up to $110 billion from $55 billion, and the Swiss National Bank, up to $27 billion from $15 billion.
New swap facilities were established by the Fed with the Bank of Japan, for $60 billion; the Bank of England, for $40 billion; and the Bank of Canada for $10 billion.
“The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures,” the European Central Bank said in a statement.
The world's major central banks banded together Thursday to flood global money markets with massive amounts of U.S. dollars, in hopes of taming a major source of the tensions rocking the financial system.
The U.S. Federal Reserve said Thursday it will expand or introduce measures to shuttle dollars to major European central banks, the Bank of Canada and the Bank of Japan, so these central banks can provide financial institutions in their respective markets with short-term dollar funding. Among commercial banks' general scramble for short-term cash in recent days, tensions in dollar-denominated money markets have been particularly fierce.
In a joint statement, the central banks said "these measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures."
And here is the FT story.