World stock markets are suffering further heavy losses today due to worldwide instability linked to problems in the US mortgage sector.
European markets slumped today, with Wall Street also trading lower, after central banks had to inject extra money to shore up the financial system.
The European Central Bank has pumped €155.8 billion in the last two days into money markets to ease pressure on credit markets, where nervousness is pushing up short-term interest rates for banks and companies. The Federal Reserve made a similar move this afternoon.
It pumped $35 billion into the banking system today, marking its biggest operation since the week of the 9/11 terror attacks, as it vied to shore up the US financial system.
The US central bank acted, a day after injecting $24 billion dollars into the market.
London's FTSE closed down 3.7% this afternoon, while Dublin's ISEQ tumbled by 4.2%, over 350 points, to close at 8,328. This is a fall of around €4.6 billion since yesterday.
The Dublin market is down around 9.6% since the start of July.
The Paris market closed down over 3% and Frankfurt down around 1.5%.
Banks suffered the heaviest losses falling as much as 5%.
The latest problems are a result of the crisis in the US sub-prime mortgage sector, as there are worries that banks worldwide are exposed to risky loans.
Analysts say the action by the central banks signals that the risk of a global credit crunch, where companies can not borrow funds they need, is greater than anticipated.
