Central Banks Unveil Coordinated Action to Ease Credit Conditions

The Federal Reserve, European Central Bank and four other central banks unveiled a coordinated action to provide liquidity to financial markets in light of strains caused by Europe's debt crisis. "The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity," the Fed said in a statement. Essentially, the Fed reducing the cost of providing dollar funding to the other banks in exchange for their respective currencies to "improve liquidity conditions in global money markets," according to the Fed's website. Continue reading the article.