FRANKFURT, Germany (AP)-the Central Bank of the richest countries, trying to prevent Europe’s debt crisis exploded into a global panic, sweeping on Wednesday to prop up the financial system of the world by making it easier for banks to borrow u.s. dollars.
Stock markets around the globe roared their approval. The Dow Jones industrial average rose almost 500 points, the best day in two and a half years. Shares rose 5 percent in Germany and more than 4 percent in France.
The Central Bank would make it cheaper for commercial banks in their countries to borrow dollars, eye dominant trade. It was very extraordinary effort coordinated by the central bank because they cut flowers together in October 2008, at the depths of the financial crisis.
But in the meantime had to reduce loans to banks, does little to solve the fundamental problem of the Government debt in Europe, leaving the market is still waiting for a permanent fix. European leaders gather next week for a Summit of the debt crisis.
The European Central Bank, which has been reluctant to intervene to halt a growing crisis on the continent itself, joined in the decision by the Federal Reserve, Bank of England and the central bank of Canada, Japan, and Switzerland.