Despite a bold and unprecedented coordinated move by the Federal Reserve, the European Central Bank (ECB) and other central banks of the wealthiest countries to prevent the the debt crisis in Europe from exploding into a monumental global panic, the situation seems to be only getting worse as banks in Britain are been told to prepare for the imminent collapse of the Eurozone.
City regulator the Financial Services Authority has told banks to ready themselves for Armageddon by running "stress tests" on their balance sheets. FSA chief Hector Sants met the heads of BARCLAYS, SANTANDER, HSBC, LLOYDS and RBS last week. News of the shock warning came as the world's biggest central banks today launched a desperate bid to save the global economy by flooding markets with cheaper cash. The Bank of England was one of six pledging to make it cheaper for big banks to access "unlimited amounts" of US dollars. And EU chiefs warned Europe had TEN DAYS to solve the debt crisis or face catastrophe. The central banks' shock action should make it easier for businesses and households to borrow — and for banks to fund themselves. Stock markets around the world soared, with the FTSE 100 up 152 points by 2pm. Germany's DAX leapt four per cent. In a statement, the Bank of England said: "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." The Bank of England was joined by the European Central Bank, the US Federal Reserve, Bank of Japan, Bank of Canada and the Swiss National Bank. They launched weekly and then three-monthly auctions of dollars in September in a bid to make more cash available. But lowering the cost is a clear sign of the growing fear that the Eurozone crisis will spark a crippling double-dip. Earlier today, EU monetary chief Olli Rehn warned: "We are now entering the critical period of ten days to complete and conclude the crisis response of the European Union." France's central bank governor Christian Noyer added: "We are now looking at a true financial crisis."