Major central banks said Monday they would offer unlimited short-term dollar credits to banks in an effort to relieve ongoing stress on the world financial system.

The European Central Bank, Bank of England, U.S. Federal Reserve and Swiss National Bank jointly announced the measure under which banks would get all the short-term dollar funding they asked for, and the Bank of Japan is considering a similar measure.

"Accordingly, sizes of the reciprocal currency arrangements (swap lines) between the Federal Reserve and the BoE, the ECB, and the SNB will be increased to accommodate whatever quantity of U.S. dollar funding is demanded. The Bank of Japan will be considering the introduction of similar measures," the ECB said in a statement.

In late September the ECB and the U.S. Federal Reserve took dead aim at the financial meltdown, doubling their swap lines for cash-hungry banks to US$240 billion, while at the time, other central banks around the world including in Japan, Canada, the Nordic countries and Australia also increased their dollar swaps bringing the total swap lines to over US$600 billion.

Meanwhile, some European central banks' overnight dollar operations continued on Monday.

The BoE has said its overnight dollar offer of US$10 billion will continue until further notice, while the SNB's daily offer of US$10 billion has been standing for weeks.

The ECB said it would not offer overnight dollars on Monday as it is a holiday in the U.S.

Daily bid and rate results on the standing offers is published in the afternoon.

The ECB said that starting Thursday 16 Oct., daily U.S. dollar overnight operations will be conducted only if necessary in view of market developments. The measures will be in place as long as needed, and at least until January 2009, the ECB's Monday statement said.