Sir Howard Davies, a former deputy governor of the Bank of England has said that a move by the central banks of six leading economies to improve the availability of credit "will oil the wheels for a little while".

Speaking to the Today programme's Justin Webb Sir Howard, who is also a former head of the London School of Economics, added that the action, which aims to make it cheaper for central banks to borrow dollars so that they can lend more easily to their local banks "looks like an initiative that has been brewing for a while".

But he admitted that he was surprised by the "market euphoria" which followed the announcement of the initiative, which saw rises in stock markets around the world.

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