Central banks coordinate actions amid fears of a global financial breakdown

News Type: Event — Seeded on Thu Dec 13, 2007 12:49 AM EST

Article Source: World Socialist Web Site

In a series of coordinated and parallel actions, the US Federal Reserve Board, the European Central Bank, the Bank of England, the Swiss National Bank and the Bank of Canada on Wednesday moved to inject tens of billions of dollars into near-frozen credit markets.

The Financial Times of London characterized the central banks' announcements as "unprecedented and coordinated moves to prevent a meltdown in the world's banking system." No similar joint action has occurred since the September 11 terrorist attacks on New York and Washington shook global markets, and Wednesday's measures go considerably beyond those taken six years ago.

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{"commentId":1265109,"authorDomain":"caltha-palustris"}

caltha-palustris

No similar joint action has occurred since the September 11 terrorist attacks on New York and Washington shook global markets, and Wednesday's measures go considerably beyond those taken six years ago.

Greenpagan, the magic number back then was $100B. I'd like to see total amounts injected by the Central Banks since August. Are we there yet?

{"commentId":1265109,"threadId":"188593","contentId":"1160331","authorDomain":"caltha-palustris"}

2 votes

#1 - Thu Dec 13, 2007 1:49 AM EST

{"commentId":1265656,"authorDomain":"IndependentVoter"}

IndependentVoter

fears of global financial breakdown

Socialists...always the alarmist....hand wringers

Financial Times

European and North American central banks on Wednesday unleashed a co-ordinated attempt to end the credit squeeze in global financial markets, setting off a wild day of trading as investors tried to make sense of a barrage of measures to increase market liquidity.

The actions – described by the Bank of England as an attempt to "demonstrate that central banks are working together to try to forestall any prospective sharp tightening of credit conditions" – helped ease pressure in money markets, a vital area of concern for policymakers. One-month Libor – the rate at which banks borrow from each other – was expected to set at 4.99 per cent on Thursday, down from 5.10 per cent on Wednesday.

The Fed said it was forming a new credit auction facility – first revealed by the Financial Times – that will offer cash to banks in return for a wide range of collateral, including housing-related securities. The Fed said it would hold two auctions of $20bn each in one-month loans this month.

Analysts hailed the announcements as evidence of the world's top central bankers working together, but some traders were angry at the Fed for failing to signal the decision after its Tuesday policy meeting. A senior Fed official said: "This was a global effort...We could not have announced yesterday as Europe was closed." He said the announcements had "nothing to do" with the negative reaction to the Tuesday rate cut.

The Sky is not falling...and will not fall.

{"commentId":1265656,"threadId":"188593","contentId":"1160331","authorDomain":"IndependentVoter"}

1 vote

#2 - Thu Dec 13, 2007 10:23 AM EST

{"commentId":1265715,"authorDomain":"greenpagan"}

greenpagan

The Sky is not falling...and will not fall.

Prosperity is just around the corner...

(The Hoover Recovery should be kicking in any day now...)

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{"commentId":1265715,"threadId":"188593","contentId":"1160331","authorDomain":"greenpagan"}

1 vote

#3 - Thu Dec 13, 2007 10:43 AM EST

{"commentId":1265777,"authorDomain":"IndependentVoter"}

IndependentVoter

Recovery from what?

{"commentId":1265777,"threadId":"188593","contentId":"1160331","authorDomain":"IndependentVoter"}

1 vote

#3.1 - Thu Dec 13, 2007 10:57 AM EST

{"canLink":false,"threadId":"188593","isPrivate":false}

Fed Helps Banks Deal With Credit Squeeze	Associated Press	Wed Dec 12
ECB to Offer Up to $20B in Dollars	Associated Press	Wed Dec 12
Fed Move Doesn't Allay Wall Street Fears	Associated Press	Wed Dec 12
Folly Of Leaving Money Creation To Independent Banks Produces Panic Underwriting By Club Of Central Banks. Loans Will Be Secret To Hide Banks' Shame Of Being In Hock	Telegraph	Thu Dec 13
Treasurys Drop on New Liquidity Facility	Associated Press	Tue Dec 11

GREENPAGAN

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Central banks coordinate actions amid fears of a global financial breakdown

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