FRANKFURT - THE US Federal Reserve and other central banks have extended dollar currency swap accords in order to ease tensions on the money markets, the European Central Bank announced on Friday.

The Fed, the Bank of England, the Swiss National Bank and the ECB will offer dollars to the markets on one week arrangements, the ECB said.

'These operations are intended to meet end-of-quarter pressures' on the markets, the ECB said.

Banks typically seek extra funds at the end of each quarter to help them balance their books but in the current financial market turmoil, credit has all but dried up, creating huge liquidity problems.

The Fed and its partner central banks have been providing hundreds of billions of dollars in liquidity in recent months in an effort to get the banks lending again but the problems caused by the US subprime home loan crisis remain.

The current situation may have been made more difficult after talks in Washington failed to reach accord on a US$700 billion (S$998.11 billion) bank rescue plan, dashing hopes of an early agreement which would ease the financial market turmoil.

News that bank JPMorgan Chase had taken over struggling Washington Mutual for $US1.9 billion dollars may also have added to the pressures.

Washington Mutual - the second largest savings and loan institution in the US had seen its shares lose 80 per cent of their value since early 2008. -- AFP