Update on the Central Banks global intervention

On September 9, I posted a rumor on Wall Street that some Central Banks were going to do some kind of "global intervention." I wrote this:

Rumor on Wall Street has it that there is going to be a very important decision this week end that will involve the "global" banking system. Many or all of the central banks in the world will be involved in an attempt to resolve the world's sovereign debt crisis, they say.

It appears now that this intervention has finally occurred and was announced today.

http://www.bbc.co.uk/news/business-14942212

Asian shares climb on market move by five central banksAsian stocks have climbed on optimism Europe's debt crisis will ease after five central banks announced new emergency liquidity measures. . . .

The move by five of the world's biggest central banks was aimed at ensuring that lenders, especially in Europe, kept providing money to each other.

There have been fears that credit markets may freeze up. . . .

Greece is the current focus of investor concern, and there are growing fears that the country may default on its bonds.

This has made European banks reluctant to lend to each other, creating the risk of short-term funding problems for those most exposed. . . .

The five central banks involved in the market co-operation are the US Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank.

The new loans are being issued in dollars, because European banks can already access additional euro funds from the European Central Bank. The three additional three-month loan offers will be conducted in October, November and December. . . .

Mr Biswas added that given the current situation, the move by the central banks could not have come soon enough.

"I think this step was very important in avoiding the kind of problems we saw in 2008, when we had that terrible crunch in credit markets, which really was a major negative factor for the global economic outlook," he added.

So as it turned out, this did not involve the Iraqi dinar. It is simply an agreement between Central Banks to continue lending to each other and not to allow the banking system to freeze up. The banks have the jitters because of the Greek debt crisis. Many are afraid of another bank crisis like what occurred in September 2008 when Lehman Brothers collapsed.

This action is designed to convince investors that Greece will NOT default on its debts.