Key Central Banks Act to Support Global Financial System

Posted November 30th, 2011 at 10:40 am (UTC-5)
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The world’s major central banks took coordinated action Wednesday to support the global financial system, an effort aimed at boosting economic activity to avert a new recession.

The U.S. Federal Reserve, the European Central Bank, the Bank of England and the central banks in Japan, Canada and Switzerland all said that starting next Monday they are making it a half percentage point cheaper to get U.S. dollars when they need them. They also moved to ensure that the banks would have easier access to money in any currency if world financial conditions warranted it.

The central banks’ action immediately sent stock prices soaring at major European exchanges in London, Paris and Frankfurt and U.S. stock futures surged ahead of the opening of trading in New York. World financial markets have been roiled for weeks — with sharp swings in stock values, up and down — as investors worry about the survival of the euro currency used by 17 European nations and the continent’s governmental debt crisis.

The central banks said the move to shore up the global financial system was aimed at easing access to credit for households and businesses to “foster economic activity.”