Fed to the rescue of euro banks

The Federal Reserve, along with every other major central bank in the industrialized world, has given an open ended pledge to Europe's big banks for an unlimited supply of dollars to guarantee that credit markets remain unfrozen. Reuters: Major central banks around the world will cooperate to offer three-month U.S. dollar loans to commercial banks in order to prevent money markets from freezing up in the wake of Europe's sovereign debt crisis. The European Central Bank said on Thursday it would hold three fixed-rate operations between October and December to provide banks as many dollars as they needed, in order to ease any funding crunch over the year-end. "The European Central Bank has decided, in coordination with the (U.S.) Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year," the ECB said. The move became...(Read Full Post)