Central banks pump billions into system

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Central banks pump billions into system London (Guardian News Service):

The Bank of England on Friday joined other central banks around the world in its biggest and boldest attempt to unfreeze international money markets, which remained paralysed by the delay in approving the huge US bank bailout.

Hard-pressed commercial banks were cheered as the Bank said it wouldswitch $30bn from overnight to one-week funds after officials becamealarmed at how lending of longer than one day had dried up. They also putup another $10bn in overnight funds. Another £40bn ($74bn) will beauctioned for three months on Monday, taking banks through thetraditionally slow Christmas period.

...Demand from cash-hungry banks, particularly for the ECB cash, was heftyas lending between banks had been almost paralysed. "There is no termlending of note between counterparties. Any term funding there is, iscoming from the central banks," said Meyrick Chapman, rates strategist atinvestment bank UBS.

Earlier in the day, the central banks of Japan, Australia and SouthKorea had pumped in cash to lubricate their respective markets....

http://www.hindu.com/thehindu/holnus/006200809271315.htm