Leading central banks around the world are to co-operate to offer three-month US dollar loans to banks in order to prevent money markets from freezing up because of Europe's debt crisis.
Some European banks have run into serious problems in borrowing dollars for their activities because US funds which usually lend to them have withdrawn because of concerns about the euro zone debt crisis.
The European Central Bank said that, in three operations between October and December, it would offer banks as many dollars as they needed, in order to ease any funding crunch.
The announcement sharply boosted stock markets, particularly European bank shares, and the euro.
''The governing council of the European Central Bank has decided, in co-ordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year," the ECB said in a statement.
"These operations will be conducted in addition to the ongoing weekly seven-day operations announced in May 2010,'' it added.
