Bank of England steps in to the money markets
Despite all of the promises of assistance from the US government it seems that money markets are in a state of paralysis awaiting news of the battle between the Democrats and Republicans. This has prompted a worldwide effort to pump temporary money into the markets with the Bank of England leading the way with a £40 billion three month injection. Moves are also afoot to allow banks to exchange some of their assets for additional liquidity with a figure in the region of $30 billion being mentioned for this separate issue.
The moves have been forced upon banks around the world after negotiations to see the bailout package through Congress have seemingly reached a stalemate. There are many reasons why the package should be pushed through but there are risks involved and the figures being mentioned are astronomical. If the bailout was to receive the approval of Congress and fail in practice then we would all be in a much worse situation than before the crisis.
This really is the last throw of the dice for worldwide markets with many governments around the world hoping and praying the deal goes through. The consequences of markets being left to their own devices are not worth even contemplating!
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