Europe urges swift US action on financial crisis

EU Commission spokesman Johannes Laitenberger said that the "United States must take its responsibility in this situation, must show statesmanship for the sake of their own country, and for the sake of the world."

"The turmoil that we are facing has originated in the United States," he added. "It has become a global problem. The United States has a special responsibility in this situation."

Belgium's Dexia bank became the country's second to get a government-assisted bailout in as many days, while Ireland boosted bank stocks by guaranteeing all domestic bank deposits. Central banks continued to pump short-term credit into banks in an effort to unfreeze interbank lending.

Still, money markets remained frozen while stock markets seesawed in response to the rejection by the U.S. House of Representatives of a $700 billion plan to buy bad mortgage-related debts from ailing financial companies. Russia halted trading for part of the day as markets fell.

German Chancellor Angela Merkel called on U.S. lawmakers to pass a package this week, saying it was the "precondition for creating new confidence on the markets--and that is of incredibly great significance."

Christian Noyer, head of the French central bank, said the rejection Monday was "bad news," and added that "the Americans don't have a choice, they must absolutely have a global plan."

In Europe, central banks offered more cash to the market in an ongoing attempt to provide liquidity to the financial system as banks remain unprepared to lend to each other for all but the shortest periods. The Bank of England said it was offering up $10 billion to a maximum of 10 bidders, while the European Central Bank offered $30 billion to banks in an overnight operation with a minimum bid amount of $5 million, and a maximum of $3 billion.

In Ireland, bank shares surged after the government unveiled an unlimited guarantee on deposits at six domestic banks a day after the Irish Stock Exchange suffered its greatest fall in history. Investors embraced the government's dramatic intervention, reversing most of Monday's stunning stock falls.

Finance Minister Brian Lenihan called on leaders across the 27-nation European Union to follow the Irish example as he also criticized American efforts as too slow.