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Last Updated: Saturday, 11 August 2007, 07:03 GMT 08:03 UK
IMF seeks to calm financial fears
Traders on the New York Stock Exchange
Fears on Wall Street are reverberating around the world
The International Monetary Fund has moved to restore calm on financial markets after two days of turmoil.

The IMF said the current crisis was "manageable", despite continuing falls in share prices around the world.

Over the past two days central banks in several countries pumped billions of dollars into banking systems in an effort to keep money flowing.

The markets have been driven down by fears that US mortgage market problems could prompt a worldwide credit crunch.

Billions of dollars, pounds and euros have been wiped off share values, hitting businesses and individual investors.

The fundamentals supporting strong global growth remain in place
IMF statement

On Friday, New York's main Dow Jones share index ended 31.14 points - or 0.2% - lower at 13,239.59.

London's FTSE 100 index had its worst day in more than four years, down 3.7%.

Earlier, the French, German and Asian indexes had also closed significantly lower.

In a statement issued late on Friday, the IMF said: "We continue to believe that the systemic consequences of the reassessment of credit risk that is taking place will be manageable.

"The fundamentals supporting strong global growth remain in place."

'Maintain the stability'

Global stock markets have been rattled by worries over financial institutions' exposure to bad credit in the US sub-prime mortgage market.

Sub-prime lenders offer loans to consumers with a poor credit history.

As a result of these problems, banks have suddenly started charging significantly more for the money they lend to each other, signalling that they are looking to limit their risks.

For their part, central banks around the world have moved to prop up markets by lending money to banks who might be in trouble.

The European Central Bank injected cash into the money market for a second day, as did other central banks worldwide.

The ECB said its move was to "assure orderly conditions in the euro money markets".

The US Federal Reserve intervened twice during the day, adding $38bn to the banking system, the largest amount since it intervened in the days following the attacks on New York and Washington on 11 September, 2001.

Japan's central bank had earlier pumped one trillion yen ($8.5bn; 4.2bn) into the financial system to boost liquidity.




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