At least six major central banks pumped billions of dollars of extra credit into financial markets Thursday amid fears that this week's crisis was drying up liquidity.

The European Central Bank (ECB) in Frankfurt said its dollar funding operations would more than double from the existing 50 billion dollars to 110 billion dollars.

The Bank of England said it would pump 40 billion dollars into money markets as part of the move co-ordinated with the US Federal Reserve.

"These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets," the Bank of Englan said.

The Bank of Japan (BOJ) conducted a currency swap deal with the Federal Reserve worth 60 billion dollars in order to provide dollar funds to financial institutions.

The bank also injected 2.5 trillion yen (23.9 billion dollars) into the money market Thursday to stabilize Japanese markets affected by the fallout from the Monday collapse of US investment bank Lehman Brothers.

BOJ had pumped 5.5 trillion yen into the markets over the previous two days.

The ECB said the measures were "designed to address elevated pressures in the short-term US dollar funding markets" and "improve the liquidity conditions in global financial markets."

It said the ECB would obtain up to 40 billion dollars from the Federal Reserve by a swap.

Other participating banks were the Bank of Canada and the Swiss National Bank.

European share prices steadied after the cash injections.

Germany's bellwether index, the DAX, rose 0.2 per cent to 5873 in early trading.

Robert Halver, a markets analyst at Baader Bank, said in Frankfurt, "The central banks are letting liquidity flood through every crack to stop the domino effect among financial institutions."

He was referring to the series of crises that culminated Thursday in British bank Lloyds taking over mortgage lender Halifax Bank of Scotland for 12.2 billion pounds.

There was speculation that Morgan Stanley of the United States might be the next merger candidate. The New York Times said in its online edition that it might be taken over by Wachovia.

In Frankfurt, markets pegged Commerzbank stock 6.1 per cent lower to 12.65 euros amid fears that its already announced takeover of Dresdner, the banking division of insurance group Allianz, might not happen after all.