£55 billion pumped into the banking system
The Bank of England has taken steps today in a bid to ease the worsening credit crisis after it injected an additional £55 billion into the banking system.
The move follows the announcement that the $700 billion (£380 billion) US financial bailout plan has been blocked.
As a result, central banks are taking action to lend extra cash to banks, these include the Bank of England, US Federal Reserve, European Central Bank and Swiss National Bank.
The Bank of England will be lending an extra $30 billion (£16 billion) for a one week period, $10 billion overnight and $40 billion in three-month loans.
Banks have become reluctant to lend to one another and there has been a sharp increase in demand for short-term lending from central banks. Consequently, banks have been turning to their central banks for funding.
In related news, the Bank of Japan has pumped funds into the Tokyo money markets today for the eight consecutive trading day.