PM hails move over credit crisis

The Prime Minister said that the move - involving the Bank of England, European Central Bank, the Bank of Canada and the Swiss National Bank - could be a model for future co-operation between financial institutions.

Each of the banks announced that they would pump additional reserves into their respective systems in a bid to ease an impending New Year freeze in wholesale money markets.

The move created an initial wave of cheer on stock markets in London on Wednesday and on the other side of the Atlantic.

The FTSE 100 Index, which had been languishing in negative territory since the start of the session, raced ahead to stand 74 points higher at one stage as investors welcomed the news, before later seeing gains scaled back.

America's Dow Jones Industrial Average also rose, surging more than 240 points ahead in early trading, helping recover some of the losses seen on Tuesday amid concern that the Federal Reserve had not done more to ease problems in the banking sector.

The Bank of England said the announcement was a measure to "address the elevated pressures in short-term funding markets".

And, in an interview with The Times, Mr Brown said he wanted the EU to focus on putting together such co-operative initiatives in the future.

"What I'm going to say to Europe is stop looking inwards, stop looking at constitutions or semi-constitutions or institutions for a long time ahead and for the foreseeable future concentrate on the big issues ahead of us," Mr Brown said. "What I'm going to do is call for Europe to show some global leadership."

The London interbank lending rate - so-called Libor - has been ticking back up in recent weeks towards levels seen at the height of the summer credit squeeze. And there are concerns that as banks rush to balance their books ahead of the year-end, credit conditions could tighten further.