The ECB injected a further euro61 billion (US$83.8 billion) Friday morning while the U.S. Federal Reserve later announced a three-day repurchase agreement to inject liquidity into the market.

The Fed said it would accept US$19 billion (nearly euro14 billion) in mortgage-backed securities after its Fed Funds rate, the rate that banks charge each other for overnight loans, ticked above 6 percent — well above the Fed’s target of 5.25 percent.

Later, the U.S. central bank said it would pump as much money as needed into the U.S. financial system to help overcome the effects of a spreading credit crunch.

The moves did little to mollify world markets, with major indexes falling from Tokyo to London.

The ECB had already provided euro95 billion (US$130.7 billion) in funds to banks on Thursday, while the Fed added US$24 billion (euro17.48 billion) and Japan’s central bank injected 1 trillion yen (US$8.4 billion; euro6.12 billion) into money markets.

It was the first time the U.S., European and Japanese central banks had taken such action together since the aftermath of the Sept. 11 terrorist attacks. The Australian, Hong Kong and Canadian central banks also joined in.

The ECB said Friday its move “aims to assure orderly conditions in the euro money market” and it pledged to keep close tabs on the situation.

But edginess in global markets — and concern about non-U.S. companies’ exposure — was reflected in sharp declines in global stock indices on Friday. London’s FTSE 100 dropped 3.2 percent, the CAC-40 in Paris fell 3.3 percent and Germany’s DAX index was down 1.5 percent.

In New York, Wall Street skidded further Friday as investors again succumbed to anxiety over tight credit conditions even after the Federal Reserve said it would do all it can to “facilitate the orderly functioning of financial markets.” The Dow Jones industrials fell more than 200 points in midmorning trading.

In midmorning trading, the Dow Jones industrials dropped 209.16, or 1.58 percent, to 13,061.52, adding to a 387-point plunge on Thursday and extending a series of triple-digit moves that began in late July.

Friday’s pullback followed the zigzag trading and triple-digit moves in the Dow since the index closed at a record 14,000.41 on July 19.

As of Thursday’s close, the Dow was down about 730 points, or 5.2 percent, from its record close.

“Market concerns about the U.S. subprime crisis are continuing without any apparent respite,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt.

Some analysts argued that the ECB — which sets monetary policy for Germany, France and 11 other EU nations — was taking a risk with the infusion as it could itself create a crisis in confidence.

“The ECB was correct to shore up banks’ balance sheets, but its high-profile announcement likely did more to scare markets than calm them,” said Peter Morici, an economics professor at the University of Maryland.

“Banks are calling in notes from hedge funds and denying private equity funds new loans for questionable investments,” Morici said. “It’s a modern-day run on the bank.”

Defaults on subprime loans — those made to people with poor credit — have climbed sharply in the United States in recent months and have triggered concern about the impact on credit markets worldwide. Until the past few weeks, most of the banks and companies affected were in the U.S.

But in Germany, insurer Allianz SE, which owns Dresdner Bank AG, revealed Friday that it has euro1.7 billion (US$2.3 billion) of exposure to the U.S. subprime market — or about 0.16 percent of its euro1.03 trillion (US$1.41 trillion) in total investments.

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