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The Federal Reserve Bank of New York's designation this week of two Canadian banks as primary dealers comes at a crucial time in which rates markets need all the liquidity they can get, analysts said on Wednesday.

European banks -- particularly those based in France and Germany with heavy exposure to Greek government bonds -- are suffering the worst damage.

Franco-Belgian financial group Dexia called an emergency board meeting on Monday after concerns about its exposure to Greece and a Moody's warning about its liquidity position raised pressure on Belgium and France to act.

European stocks are dropping on reports that the Greek government will not achieve the deficit targets it needs to receive the next tranche of the bailout from the European Union (EU) and International Monetary Fund (IMF).

Societe Generale has put up for sale its stake in Newedge, a futures and clearing brokerage it co-owns with Credit Agricole , a source familiar with the situation said on Tuesday, as the No. 2 French bank looks to shrink its balance sheet and sell risky assets.

France could use a support mechanism set up at the height of the banking crisis in 2008 to shore up the capital bases of French banks in case of an extraordinary event, Christian Noyer, head of the Bank of France, told a French newspaper.

Europe's banks could face a capital shortfall of hundreds of billions of euros if Greece forces them to slash the value of its debt by 50 percent and other troubled euro zone countries like Italy and Ireland follow suit.

U.S. stocks have opened sharply lower in Thursday morning trading following an overnight plunge in global markets. Equities have tumbled largely in response to the Federal Reserve’s grim warning about the state of the U.S. economy and the establishment bond swap program.

Foreign equities tumbled largely in response to the Federal Reserve’s grim warning about the state of the U.S. economy.

Greece adopted yet more austerity measures on Wednesday to secure a bailout installment crucial to avoid running out of money next month, as the IMF warned that Europe's sovereign debt crisis risks tearing a giant hole in banks' capital.

Gold and silver prices slipped modestly and the U.S. dollar edged higher Wednesday as the financial world awaited results of a two-day meeting by leaders of the U.S. central bank that was expected to result in fresh efforts to stimulate business.

Asian stocks drifted slightly lower Wednesday and the euro clawed back lost ground as investors waited for the end of a Federal Reserve policy meeting that may act to stimulate the U.S. economy.

Asian stocks drifted slightly lower and the euro clawed back lost ground as investors waited for the end later on Wednesday of a Federal Reserve policy meeting expected to announce further steps to stimulate the flagging U.S. economic recovery.

German engineering group Siemens withdrew funds from Societe Generale in July because of underperformance, not fears over the French bank's financial health, a Paris-based source said on Tuesday.

Standard & Poor's cut Italy's credit rating on Tuesday in a surprise move that increased strains on the debt-stressed euro zone and raised pressure on policymakers to take more decisive action to resolve the crisis.

As Europe's debt crisis deepens, low-yielding U.S. government debt and the much maligned dollar are suddenly glowing more brightly than gold.

Bank of China, a big market-maker in China's onshore foreign exchange market, has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, three sources with direct knowledge of the matter told Reuters on Tuesday.

Standard & Poor's cut Italy's credit rating on Tuesday in a surprise move that increased strains on the debt-stressed euro zone and raised pressure on policymakers to take more decisive action to resolve the crisis.

Bank of China, a big market-maker in China's onshore foreign exchange market, has stopped foreign exchange forwards and swaps trading with several European banks due to the unfolding debt crisis in Europe, three sources with direct knowledge of the matter told Reuters on Tuesday.

Siemens withdrew deposits from a large French bank two weeks ago and transferred them to the European Central Bank, in the search for a safe haven, the Financial Times reported on Tuesday.

Moody's Investors Service on Friday said it would finish reviewing Italy's Aa2 sovereign currency credit rating for possible downgrade within the next month, adding Italy faces a challenging economic and financial environment.

The new loan offers will be conducted in October, November and December.

Treasury Secretary Timothy Geithner will discuss with European finance ministers the possibility of leveraging the euro zone's bailout fund to make it more effective in fighting the debt crisis.

Gold prices slipped below $1,800 an ounce on Thursday as stock markets extended gains, with assurances from Germany and France about keeping Greece in the euro bloc boosting appetite for assets seen as higher risk at the precious metal's expense.

Stocks were set for a higher open on Wednesday after the head of the European Commission said it will present options for joint euro zone bonds, a tool that investors view as a step forward to addressing the region's debt crisis.

Moody's cut the credit ratings of two French banks on Wednesday because of their exposure to Greece's debt, highlighting growing risks to Europe's financial sector from a deepening euro zone sovereign debt crisis.

Top French bank BNP Paribas plans to sell 70 billion euros ($96 billion) of risk-weighted assets to ease investor fears about French bank leverage and funding as its main rivals were hit by ratings downgrades.

U.S. stocks were set for a higher open on Wednesday after the head of the European Commission said it will present options for joint euro zone bonds, a tool that investors view as a step forward to addressing the region's debt crisis.

Stock index futures rose on Wednesday after the head of the European Commission said it will present options for joint euro zone bonds, a tool that might help resolve the region's debt crisis.