BRUSSELS: The world's top central banks sprang into action Wednesday to help cash-strapped banks, while the EU acknowledged it has 10 days in which to fix a crisis threatening a global financial meltdown.
The central banks of the eurozone, the United States, Japan, Switzerland, Canada and Britain collectively announced a giant shot in the arm with "liquidity support to the global financial system."
Stocks and the euro each surged on the move intended to restore some confidence on markets wearied by the failure of leaders to act decisively to a crisis that French Foreign Minister Alain Juppe warned risks destroying Europe and a return to conflicts on the continent.
Many banks are being squeezed by the weight of downgraded government debt bonds in their books and have been finding it difficult to borrow from one another. This has raised pressure to reduce lending to businesses that would choke off economic growth.
The central banks said they would make funds available to banks at lower interest rates until February 2013 in order to "mitigate the effects of such strains on the supply of credit to households and businesses."
The moves echo similar action in May 2010, when the EU first acknowledged that the Greek drama had become a wider euro crisis causing deep concern among international partners from the United States to Japan.
The massive worldwide injection of hard cash came after the EU's euro crisis commissioner Olli Rehn set the deadline of the end of next week's summit for the bloc to fix the festering debt crisis.
The European Union faces "a critical period of 10 days to complete and conclude the crisis response," Rehn said amid a resurgence of government calls for the ECB and the International Monetary Fund to save the day.
The crisis of market confidence comes hand in hand with a wave of strikes and protests given added weight when data released Wednesday showed unemployment hitting a record 10.3-percent throughout the eurozone.
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