Cash injection

Earlier on Thursday, referring to the injection of money by the banks, the Bank of England, said: "Today [the six central banks] are announcing co-ordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets.

"These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets."

The plan to increase liquidity in money markets came after Asian financial markets performed poorly in Thursday trading.
 
Following Wall Street's four per cent drop overnight, share prices on Hong Kong's Hang Seng index plunged nearly eight per cent on Thursday, before recovering to finish flat.

Tokyo's benchmark Nikkei index lost more than three per cent, South Korea's Kospi fell more than two per cent and Australian shares also extended losses to 3.5 per cent in early trade.

 

McCain comments

 

The falls come in spite of the US government's announcement that it would rescue the troubled insurance group AIG by lending it $85bn in exchange for a nearly 80 per cent stake in the company.

 

Speaking on Thursday, John McCain, the Republican presidential candidate, said that if he was elected president he would fire Christopher Cox, the US Securities and Exchange Commission chairman, for failing in his oversight of Wall Street.

 

The Arizona senator also called for a new Mortgage and Financial Institutions trust to work with regulators and the private sector to strengthen financial institutions that are weak before they become insolvent.

 

Addressing a rally in Iowa, McCain said: "For troubled institutions this will provide an orderly process through which to identify bad loans and eventually sell them."

 

Immediate action

 

William Browder, CEO of the investment group Hermitage Capital Management, told Al Jazeera that the current financial crisis demands immediate action.

"It is a problem of global proportions and it is not just happening in one country. I suspect that this is not going to be the last big action that the regulators take," he said.

"In a moment like this, where everyone is competing with each other to sell everything, it is very hard to say that money is safe even under the mattress.

"If the governments are investing millions into the markets, where is that money coming from? They probably printed it. Even the money under the mattress will be inflated away."