CENTRAL BANKS STEP IN TO SHORE UP SYSTEM - Irish shares are expected to fall again today after losses on Wall Street and in overnight Asia trading.

Things were looking so bad yesterday that the European Central Bank had to dig deep into its reserves and inject €95 billion into the banking system to prevent the supply of money for borrowing from freezing up.

Alan Ahearne of NUI Galway said this was because interest rates on the interbank market, where banks lend to each other, rose yesterday. He said banks became wary of lending as there is uncertainty about which institutions are exposed to the problems in the US sub-prime mortgage sector.

He added that hedge funds and investment funds which had invested in sub-prime mortgages were also desperate for credit from banks.

Mr Ahearne said he thought the ECB would have to step in again as there was still stress in the market.

Sub-prime mortgages, made to people with poor credit histories, were sold on by US lenders to other investors around the world, and there is now uncertainty about who owns these debts.

The economist did not think, however, that the volatility would affect the ECB's decision on interest rates in September, when an increase is likely.


IBEC TO HOST SHANNON CRISIS TALKS - It is day four of the economic crisis facing the Mid -West following Aer Lingus's no u-turn decision to abandon its twice-daily Shannon to Heathrow service.

Employers' group IBEC is jointly running a meeting today to co-ordinate the response of employers and form an alliance to halt the move.

IBEC's director of policy Danny McCoy said access was needed to the regions, and the meeting was aimed at making the business case for a connection to Heathrow. He said persuading Aer Lingus to reverse its decision was just one option, and a decision to restore the Heathrow service had to be on a commercial basis.


CURRENCIES - The euro is worth $1.3670 and 67.7p sterling.