Following the losses that some european banks were forced to accept, as part of the Greek debt restructuring process and nervousness over banks holding Italian and other risky European debt instruments, liquidity has become a problem.

If you lend to a bank that has exposure to these countries and should it fold you lose, so better not take that chance. This has caused massive problems in the financial sector that the central banks are looking to resolve, by injecting huge amounts of capital into the system, that will relieve the pressure on banks struggling to obtain funding in the markets.

On the back of this unexpected news, equity markets have surged 3% plus, as the central bank heavyweights have coordinated their actions to commence on December 5th.

The participant banks are:

• The European Central Bank
• Bank of England
• Federal Reserve Bank in US
• Central Bank's of Japan, Canada and Switzerland