1 Dec 2011

Banks agree on attempt to boost world's economy

6:22 am on 1 December 2011

Some of the world's largest central banks have agreed to take coordinated action to shore up the global financial system during the euro zone's escalating debt crisis.

The action is designed to improve the availability of credit for businesses and households.

Global shares soared on the announcement, which will make it cheaper for banks to trade in United States dollars.

The US Federal Reserve, the European Central Bank and the central banks of England, Japan, Canada and Switzerland released joint statements aimed at boosting economic activity.

They said they would cut by about half the cost of a programme in which banks around the world can borrow US dollars from their own central bank.

The banks in turn swap those dollars with the US Federal Reserve in exchange for an equivalent amount of foreign currency.

The plan also gives the participating banks easier access to euros, Japanese yen, British pounds, Swiss francs and Canadian dollars if necessary.