NEW YORK, Sept 18: The US Federal Reserve, and central banks in Europe, Canada and Asia, pumped as much as $180 billion into money markets on Thursday to combat shock waves from the worst financial upheaval since the Great Depression of the 1930s.

The move was aimed at boosting waning confidence that governments can stop the crisis from spinning out of control and at getting banks around the world to open their ever-tightening purse strings. Banks have been increasingly reluctant to lend to each other as distrust spread throughout the financial system.

Asian markets closed lower, but the Fed action helped send European stocks higher after three days of losses.

Wall Street initially rallied, but trimmed gains as the morning wore on, after plunging 450 points on Wednesday when a government bailout of American International Group, one of the world’s largest insurers, failed to settle the markets’ frayed nerves.

In a statement the Fed said it had authorised the expansion of swap lines, or reciprocal currency arrangements, with the other central banks, including amounts up to $110 billion by the European Central Bank and up to $27 million by the Swiss National Bank.

The Fed also said new swap facilities had been authorised with the Bank of Japan for as much as $60 billion; $40 billion for the Bank of England and $10 billion for the Bank of Canada.

All told, Fed action increased lines of cash to central banks by $180 billion to $247 billion.

Worries that other financial companies could fail and further upend the economic system may cast a pall on the central banks’ step, which spread billions of dollars around the world in exchange for foreign currencies.

—AP