Will central banks need to inject massive amounts of cash?
*Reuters, by Burton Frierson, September 29, 2008
“The world’s central banks redoubled their efforts on Monday to revive the paralyzed global financial system through massive injections of cash.
To counteract a world financial crisis emanating from last year’s mortgage meltdown in the United States, the Federal Reserve announced a $330 billion expansion of arrangements to boost U.S. dollar liquidity throughout the global financial system.
The action increases the reciprocal swap lines with the European Central Bank and eight other central banks to $620 billion from $290 billion previously, the Fed said in a statement.
The Fed announcement came after European and Asian central banks had already been busy pumping more money into sclerotic banking systems on Monday, in an effort to persuade financial firms to stop hoarding cash, which threatens to bring down global economy.”
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