MyUSTINET News: Bank Of Canada To Inject $4B To Help Banks

OTTAWA, Sept. 30 (UPI) -- The Bank of Canada said Tuesday it would inject $4 billion into short-term money markets in the hope of helping banks cope with the U.S. financial meltdown.

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The intervention -- twice what the central bank said Thursday it would inject -- comes in the form of 28-day money to be auctioned Wednesday "in light of increased pressures in term lending markets", the central bank said in a statement.

"The bank will continue to provide additional term liquidity as long as conditions in financial markets warrant", the statement said.

The bank also said it would seek to offset the balance-sheet effects of the intervention by selling $4 billion in treasury bills.

The move comes as central banks around the world seek to restore normal lending between financial institutions after U.S. lawmakers rejected a $700 billion Wall Street rescue plan.

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