"The US Federal Reserve spearheaded a scheme by central banks around the world, including the Bank of England, to lend money to ailing European banks that were struggling to borrow.
The emergency action to stop the international financial system from freezing up again was prompted by rumours that a European bank was facing difficulties and could not raise money. Panic started to spread through the German bond markets, which threatened to result in a credit freeze for European banks.
British banks have been warned by the Financial Services Authority, the City watchdog, that they must make preparations for the collapse of the single currency.
Downing Street sources insisted that the global economy was not facing a “Lehman’s moment”, in reference to the collapse of the American investment bank.
However, a spokesman for the Prime Minister said: “Clearly there is a very serious situation in the financial markets at this time"...........READ MORE
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