Wim Duisenberg: Slashes interest rates
The ECB move, which came at 1533GMT, just before European markets were due to close, immediately boosted shares as it showed the coordinated nature of the response of the world's financial authorities.
The ECB said it made the move "in concert" with the US central bank because the short-term prospects for European growth had worsened as a result of the events in the United States.
"Following the terrorist attacks on the US, uncertainty about the US and world economy has increased," the bank said.
The cut, from 4.25% to 3.75%, came just days after the ECB said it would take no action at its regular rate-setting last Thursday.
The Fed move, which came an hour before trading was due to resume on Wall Street following last week's terrorist attacks, had failed to stop US markets plummeting around 5%.
Nevertheless the speed of the Fed's move surprised traders, who had expected the central bank to wait and see how the markets performed before cutting rates.
The Fed has now cut rates eight times this year fom 6.5% to 3%.
The moves come as central banks around the world attempt to minimise the economic and financial-market fallout from the attacks on the US.
Knock-on effect
The Fed warned that the tragic events of the last week could contribute to further weakness in the US economy, already on the brink of a recession.
And the Fed said it believed the US economy would continue to face a bigger risk from slowdown than from a possible surge in inflation, signalling it stood ready to make more cuts.
In a statement, the Fed said it would "continue to supply unusually large volumes of liquidity to the financial markets".
That could lead to market interest rates dropping further as the Fed continues to buy securities to ensure orderly trading in New York.
Co-ordinated action?
Earlier in the day, the Japanese central bank intervened in currency markets, and it is widely expected to lower its interest rates further and make more money available to the Japanese banking system.
And last week, central banks moved swiftly to stabilise currency markets in the wake of the attack on New York and Washington.
In an unusual move, the US Federal Reserve said it was making $50bn available to support the European banking system.
The Fed's offer was the largest in a number of multi-billion dollar cash boosts offered by central banks on Thursday and Friday to steady currency markets, totalling more than $190bn.
Long term fears
Many observers feared that the turmoil which beset financial markets would have a knock-on effect on the health of the world financial system.
If bank lending were to dry up, international policy-makers fear it could push the already vulnerable global economy into recession.
On Wednesday, finance ministers from the G7 group of industrialised nations issued a communiqué, in which they said they would "monitor economic developments and financial markets closely and stand ready to take further action as necessary".
Now, those ministers will meet next week - probably in Italy - to discuss longer-term solutions to the world's economic difficulties.
But the annual meeting of the IMF and World Bank, which was also due to take place in Washington next week, has been cancelled.
There is talk of more intervention in the foreign exchange markets, in order to prevent damaging volatility in the value of the dollar.
Mr Duisenberg has said that he was prepared for currency intervention, echoing an earlier pledge from Japanese finance minister Masajuro Shiokawa.