A move by central banks, including the Bank of England and the Federal Reserve, to introduce liquidity into global capital markets has had some early success.
London Interbank Offered Rate (Libor), the rate at which most banks lend to each other, has fallen from 6.627% to 6.514%.
Between them the central banks have contributed £54bn in cash to money markets, only about twice the amount which the Bank of England has lent to Northern Rock.
The Banks announced yesterday that they would be providing liquidity to the markets to help ease borrowing pressure, a tactic which may help prevent a recession in the US and other parts of the Western World.
Analysts say the lack of liquidity has become particularly problematic towards the end of the year as banks hoard money before their annual reports.
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