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Another Bailout Coming?

Mike

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Manipulating world markets with our dollars?? Yep.


LONDON -- Five central banks acted Thursday to shore up confidence in Europe's finan­cial system by giving its banks far greater access to U.S. dol­lars.

The move buys time for banks that hold large amounts of debt issued by Greece and other financially troubled European countries. Some of these banks have had trouble paying for dai­ly operations because other banks have refused to lend to them any more.

Under Thursday's action, the banks can borrow unlimited dol­lars for three months, up from the current one-week limit.

The European Central Bank said it will coordinate with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to offer the loans through the end of this year. Their move to sup­ply more dollars is similar to steps taken during the 2008 fin­ancial crisis and again in May 2010.

The news reassured stock markets, which have been bat­tered by rumors that banks' losses on their loans to Greece might sink them. Stock indexes in France and Germany each surged 3.1 percent. The euro rose against other currencies. U.S. indexes rose by more than 1 percent.

Concern about their access to dollars has been a key reason why European banking stocks have been beaten down. Inves­tors have been particularly wor­ried about big French banks So­ciete Generale and BNP Paribas. Thursday's news sent Societe Generale's stock soaring 8 per­cent and BNP Paribas' 13 per­cent.
 

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