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Associated Press WorldStream via NewsEdge :

FRANKFURT, Germany_The European Central Bank and the U.S. Federal Reserve took dead aim at the financial meltdown that roared into Europe on Monday, doubling to US$240 billion the amount of dollars available for cash-hungry banks.

The Fed and the ECB _ the central bank for the 15 countries that use the euro _ said in a statement that they would raise their temporary reciprocal currency arrangements, or swap lines, from US$120 billion to US$240 billion as part of a worldwide move that included central banks in Japan, Canada, the Nordic countries and Australia.

“In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity,” the ECB said in a statement.

Other central banks around the world also said they would provide extra U.S. dollars to banks, too.

The Bank of Canada said it and the Fed had agreed to expand their swap facility to US$30 billion from the US$10 billion announced less than two weeks ago.

On its Web site, the Bank of England said that was “increasing the size of its swap facility with the Federal Reserve to allow the provision of up to US$80 billion in dollar liquidity, should that be needed,” from its current US$40 billion.

The Bank of Japan said it would increase its swap to US$120 billion from US$60 billion; the Swiss National Bank said it would also double its swap line to US$60 billion from US$30 billion; the Reserve Bank of Australia said it would increase its swap to US$20 billion in addition to the US$10 billion swap line announced last week.

Norway’s Central bank said it would increase its swap to US$15 billion from US$5 billion, while the Riksbank in Sweden said it would extend its swap with the Fed to US$30 billion.

The Danish National Bank also increased its swap according to the ECB, though no statement was available on the Dane’s Web site.

All of the swap arrangements end April 30, 2009, the statements said.

Earlier Monday, the ECB said it offered up €120 billion in an existing long-term refinancing operation that matures in November. Demand was high with 210 banks bidding a combined €141.6 billion.

That was on top of a special operation to provide more cash to banks in the euro zone as the financial meltdown’s tendrils enveloped banks in Britain, the Benelux, Iceland, Denmark and Germany.

At the same time, the Bank of England launched a US$10 billion overnight tender Monday which was over subscribed by more than US$3 billion by 10 bidders, indicating demand for credit exceeded supply.

In Zurich, the Swiss National Bank said it had offered markets a one week auction at 1.85 percent.

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AP Business writer George Frey contributed to this report.

<<Associated Press WorldStream — 09/30/08>>