Global crisis plans should thaw markets

By Chris Sanders

NEW YORK (Reuters) - Last-ditch efforts to unclog credit markets and halt a record slide in stock markets from Tokyo to Wall Street should ease serious strains in the global financial system, but the devil will be in the details.

Governments in Europe were the latest to craft a response to the crisis, before fearful world markets reopened for the week, with a pledge on Sunday to pump public money into banks battered by the worst financial crisis since the 1930s.

The unprecedented European action follows a similar effort in the United States where the government said on Friday it is developing plans to buy stakes in financial institutions.

It also comes on the heels of a British plan to pour up 37 billion pounds into its banks and underwrite interbank lending.

Markets responded positively to the broader strategy with U.S. stock index futures surging after the market opened Sunday night, while the U.S. dollar lost some of the safe-haven appeal it had seen in recent weeks.

"This is a step in the right direction. Banking guarantees are nothing new, similar measures were already taken by some European governments. But this should help stabilize European markets next week," said Kathy Lien, head of currency research at GFT Forex in New York and speaking of Europe's plan.

"It seems central banks and the finance leaders are finally beginning to move in a coordinated manner," she added.

Aside from coordination, some analysts said the European plan in particular attacked core issues behind faltering banks and credit markets.  Continued...