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| UK welcomes world cash injection | |
| (10 minutes later) | |
| UK Prime Minister Gordon Brown has welcomed a joint plan by the US Federal Reserve and other central banks to ease a credit crunch in financial markets. | |
| In an interview with the UK's Times newspaper, Mr Brown said there should be more focus on such cooperation. | In an interview with the UK's Times newspaper, Mr Brown said there should be more focus on such cooperation. |
| His comments come after it emerged that up to $110bn (£54bn) in central bank loans would be made available to world money markets in an unprecedented step. | His comments come after it emerged that up to $110bn (£54bn) in central bank loans would be made available to world money markets in an unprecedented step. |
| Analysts said the bold move is a sign of the severity of the credit woes. | Analysts said the bold move is a sign of the severity of the credit woes. |
| The Federal Reserve will team up with the European Central Bank and central banks from the UK, Canada and Switzerland to offer the cash loans, to be made available in auctions. | The Federal Reserve will team up with the European Central Bank and central banks from the UK, Canada and Switzerland to offer the cash loans, to be made available in auctions. |
| Such a cooperative act is a first, BBC's Robert Peston said earlier. | Such a cooperative act is a first, BBC's Robert Peston said earlier. |
| Other analysts pointed out that the actions are on a greater scale to the moves taken by the Fed after the September 11 attacks on America to shore up the economy. | Other analysts pointed out that the actions are on a greater scale to the moves taken by the Fed after the September 11 attacks on America to shore up the economy. |
| Staving off recession | |
| Share prices in the US rose sharply after the plan was announced, but have since dropped again. | |
| Five of the most powerful central banks are taking concerted action to stop a banking crisis turning into a recession, the BBC's Mark Gregory notes. | |
| The problem is that commercial banks in rich nations have sustained huge losses on investments that have gone sour. | |
| This has made them reluctant to lend any more money, especially to each other. | |
| By acting together to pump extra funds into the system in the form of loans, the central banks hope to have a bigger impact. | |
| But they are also putting their credibility on the line, our reporter notes. | |
| If the plan fails, it is unclear what else they could do to restore confidence, he adds. | |
| Capital gap | |
| Peter Dunay, chief strategist at investment bank Leeb Capital Management in New York, said the new money could only help, but there was a broader problem to consider. | |
| "Ideally, what we are looking for is the financial institutions to have written off their problems, built up confidence and are willing to lend to each other," he told the BBC's World Today programme. | |
| "Right now... they do not want to lend - they do not want to lend to the public, they do not want to lend to each other. | |
| "They don't have the capital, they're very concerned and they're holding a lot of debt that is still a problem for them." |