Credit fears hit global markets

David Teather and Andrew Clark in New York
Thursday August 9, 2007

Guardian Unlimited

Central banks on both sides of the Atlantic pumped billions into the financial system to calm nerves over an impending credit crunch today - but their actions only served to heighten alarm, prompting a fresh plunge in global share prices.

The European Central Bank injected an emergency €95bn (£64.5bn) into the markets in its first intervention since the turmoil triggered by the 9/11 terrorist attacks on New York and Washington DC in 2001.

In America, the Federal Reserve added $24bn (£12bn) in temporary reserves to the US banking system to shore up liquidity and bring down short-term interest rates, while the Bank of Canada mounted a similar operation.