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The Bank of Canada, the Bank of England, the European Central Bank (ECB), the US Federal Reserve, the Bank of Japan and the Swiss National Bank have coordinated measures to tackle the continued elevated pressures in US dollar short-term funding markets.

The Federal Open Market Committee has authorised an $180bn expansion of its temporary reciprocal currency arrangements (swap lines), while the ECB is offering up an extra $55bn.

The Swiss National Bank will support the provision of US dollar liquidity with support of $27bn, an increase of $15bn.

In addition, new swap facilities have been authorised with the Bank of Japan, the Bank of England, and the Bank of Canada.

These facilities will support the provision of US dollar liquidity in amounts of up to $60bn by the Bank of Japan, $40bn by the Bank of England, and $10bn by the Bank of Canada.

These amounts will be reviewed on a regular basis in consultation with the other central banks, with the central aim being to ensure global financial markets are supported.

All of these currency arrangements have been authorised until 30 January 2009.

The coordinated move by the banks follows days of global financial turmoil.

So far this week, US giant Lehman Brothers collapsed and filed for Chapter 11 bankruptcy protection.

HBoS, thought to be one of the most capitalised British banks, also lost as much as 70 per cent of the value of its shares, leading to a rescue by Lloyds TSB in the form of a merger.

The US government also bailed out insurance firm AIG after it also looked likely to collapse.