Central Banks Take Coordinated Action to Help Global Financial System and Eurozone Crisis

The world’s major central banks launched a joint action to provide cheap, emergency U.S. dollar loans to banks in Europe and elsewhere, a sign of growing alarm among policy makers about stresses in Europe and in the global financial system.

The coordinated action doesn’t directly address Europe’s government-debt and budget woes. Instead, it is aimed at alleviating the impact of those troubles on global markets. Moreover, it raises the prospect of other steps by central bankers to prevent a repeat of the 2008 financial crisis.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” said a statement issued by the six central banks””the U.S. Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Economy, Europe, European Central Bank, Federal Reserve, Globalization, The U.S. Government

2 comments on “Central Banks Take Coordinated Action to Help Global Financial System and Eurozone Crisis

  1. Bart Hall (Kansas, USA) says:

    It won’t matter. Excess-debt bubbles, and this one is by far the worst in history, always end in deflationary collapse. Banks and governments cannot generate new money supply as fast as the collapse of debt (either by repayment or default) destroys it.

    For monetary geeks, velocity also tanks, reinforcing the effect. This and all reflation efforts will eventually fail, and the economy will not improve until all th bad debt is washed away. All of it.

  2. evan miller says:

    Good money after bad.