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Central Banks

Central banks around the globe pumped billions of dollars into banking systems on Friday in a concerted effort to beat back a widening credit crisis, and they pledged to do more if needed.

In all, central banks in Europe, Asia and North America have pumped out more than US$300 billion over 48 hours in an effort to keep money flowing through the arteries of the global financial system, hoping to prevent a credit market seizure that could imperil economies.

In a rare statement of reassurance that underlined the seriousness with which it views the current bout of market stress, the US Federal Reserve said it would provide cash as needed to ensure markets functioned smoothly. The statement was the first of its kind since Sep 11, 2001, when terror attacks brought the US financial system to a virtual halt.

The Fed conducted three separate operations on Friday, pumping a total of US$38 billion into the banking system, the largest amount for any single day since Sep 19, 2001.