The US Federal Reserve announced a joint action with European banks to step up a battle against a persistent global credit crisis that has shackled lending and slowed the world economy.
The Fed, the European Central Bank and the Swiss National Bank decided to expand their efforts to open up credit 'in view of the persistent liquidity pressures in some term funding markets,' the US central bank said in a statement.
The ECB said it would continue to provide support to risk-averse banks 'as long as necessary in order to ease persistent liquidity pressures' on money markets.
The Fed raised the amount of monthly lending available to banks by $50 billion to $150 billion under the so-called Term Auction Facility, beginning next Monday.
The Fed also increased the size of its swap agreements with the ECB and the SNB and expanded the type of collateral that investment banks can use to obtain its loans.
Fed chairman Ben Bernanke has led a series of steps to help get credit flowing in the global financial system that seized up in August amid rising defaults on US sub-prime, or high-risk, mortgages.
