Fed promises rapid response to economic meltdown

The US Federal Reserve will provide as much as US$900bn (€667bn) in cash loans to squeezed banks in an effort to break through a dangerous credit clog that has unhinged financial markets around the globe.

The action by the US central bank, known as the Fed, is aimed at spurring spooked financial institutions, which are hoarding cash, to lend not only to each other but also to individuals and businesses.