Central banks move to ease debt crisis Major central banks across the world to provide low-cost, emergency US dollar loans to banks in Europe and elsewhere.

Major central banks around the world have announced a programme of co-ordinated action designed to support the global financial system.

The European Central Bank, the US Federal Reserve, the Bank of England and the central banks of Canada, Japan and Switzerland are all taking part in the initiative.

It will be now cheaper for banks to buy US dollars, which will ultimately help businesses and households access finance more easily. 

Stock markets rose sharply on Wednesday following the announcement of the plan which will start from December 5.

The possibility that one or more European governments might default on loan payments has raised fears of a shock to the global financial system that would lead to severe losses for banks, recessions in the US and Europe, and a stranglehold on lending.

The central banks agreed to reduce the cost of temporary dollar loans they offer to banks, called liquidity swaps, by a half percentage point.

In a joint statement, the banks said, "the purpose of these actions is to ease strains in financial markets and

thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity".

Al Jazeera's Scott Heidler reporting from New York says: This makes it easier and less expensive to get dollars, for banks in Europe it was expensive."

"This is a quick fix, it won't resolve the eurozone crisis in the long run," said our reporter.

Aljazaara