Page last updated at 09:44 GMT, Friday, 26 September 2008 10:44 UK

More cash is injected into banks

Bank of England
It is the latest in a series of co-ordinated central bank cash injections

Central banks are taking co-ordinated action to lend extra cash to banks.

The Bank of England, US Federal Reserve, European Central Bank and Swiss National Bank will be involved.

The Bank of England will be lending an extra $30bn (£16bn) for a one week period, $10bn overnight and $40bn in three-month loans.

The Bank of England had been holding auctions of three-month loans once a month but will be holding them once a week for at least the next three weeks.

The central banks said that the extra cash was intended to help banks as they approach the end of the financial third quarter next week.

Bottom line of all this is that the Age of Anxiety is far from over
Robert Peston, Business editor, BBC News

Banks have been turning to their central banks for funding because they have been struggling to borrow from each other as they would usually do.

One of the reasons they have been reluctant to lend to each other has been the fear of further bank failures and the news that Washington Mutual has become the biggest US bank to fail will do nothing to help that situation.

Banks will be able to use their mortgage books as security on the loans.

Separately, the Bank of Japan injected cash into the Tokyo money markets on Friday for the eighth trading day in a row.

It injected 1.5 trillion yen ($14bn; £8bn) into the market, although it later removed 300bn yen of that.


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