Fed, ECB, BOJ Take Joint Action to Alleviate Tensions (Update1)

Fed, ECB, BOJ Take Joint Action to Alleviate Tensions (Update1)
By John Fraher and Brian Swint
Sept. 18 (Bloomberg) -- The Federal Reserve, the European Central Bank and the Bank of Japan joined with their counterparts around the world to pump dollars into the financial system and head off a deepening crisis.
The Fed said it authorized other central banks to auction $180 billion in dollar funds to financial institutions, in a statement on its Website. A joint release said that the Bank of England, the Bank of Canada and the Swiss National Bank also participated.
``The action is designed to address the continued elevated pressures in U.S. dollar short-term funding markets,'' the banks said. ``The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures.''
Central bankers have struggled to restore confidence in markets this week as banks hoarded money on concern more banks will follow Lehman Brothers Holdings Inc. into bankruptcy. The cost of borrowing in dollars for three months jumped the most since 1999 with the crisis spreading abroad as U.K. mortgage lender HBOS Plc slumped and Russia poured money into its banks.
``The lack of dollars has been making the financial crisis worse around the world which is why we now have this coordinated response,'' said Robert Barrie, an economist at Credit Suisse Group in London.