MAJOR central banks around the world will cooperate to offer three-month US dollar loans to commercial banks to prevent money markets freezing up because of Europe's sovereign debt crisis.

The European Central Bank yesterday said it would hold three fixed-rate issues between October and December to offer banks as many dollars as they needed in order to ease any funding crunch as the year ends.

The ECB said: "The bank has decided, in coordination with the US Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year."

Some European banks have struggled to obtain dollar funding as lenders have become increasingly nervous about eurozone debt and the global economic slowdown.

The British and Swiss central banks said they would conduct three-month dollar lending operations simultaneously with the ECB on October 12, November 9 and December 7.

Source:shanghaidaily