Global credit markets showed more signs of a thaw on Tuesday and Australia cut interest rates sharply ahead of expected reductions in Europe this week, but the deep freeze in bank lending appeared far from over. US voters went to the polls to decide who will face the challenge of leading the world's largest economy out of its worst financial crisis in 80 years.
Polls close in parts of Indiana and Kentucky at 6 p.m. EST (2300 GMT) and over the following six hours in the other 48 states and the District of Columbia. Key bank-to-bank lending rates fell to their lowest in five months as the sector tried to put the worst of the credit crisis behind it.
EU leaders pressed for an overhaul of financial market rules that were seen lacking as the current turmoil spread around the globe, and German Chancellor Angela Merkel demanded world leaders agree quickly on a new framework. "It mustn't take years, it must be done in months," Merkel said in Berlin.
European Union finance ministers backed proposals for a reform of the G8 club of major industrial nations and an end to the self-regulation in global financial markets that critics say caused the credit crisis.
European leaders such as British Prime Minister Gordon Brown and French President Nicolas Sarkozy want a "Bretton Woods"-style reworking of supervision of global capital markets. Bretton Woods, a meeting of allied nations in July 1944, established a framework for regulating global money and finance after World War II.
Australia's bigger-than-expected 75-basis-point rate cut followed cuts in the United States, China and Japan last week. Britain and the euro zone are expected to follow suit on Thursday with half-point reductions, or maybe more.
Japan's Nikkei rose 6.3 percent to a two-week high, while Europe's FTSEurofirst 300 index closed up 4.3 percent. In the United States, the Dow was 2.5 percent higher.
CREDIT CRUNCH: Recession, which authorities have tried to temper with trillions of dollars in bank bailouts, cash thrown into money markets The United States needs a new fiscal policy boost to complement aggressive steps taken by the Federal Reserve to shield the economy from a global credit crisis, one of its top policymakers said.ically, slapping back tax bills on companies, such as oil majors, in disputes with the government.