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Two continents. Two central banks. Two views of how much danger the subprime mortgage market implosion poses.
In Europe, worries that liquidity was drying up because some banks are unable to value securities backed by subprime U.S. mortgages pushed its central bank to inject a torrent of cash into markets Thursday.
For the Federal Reserve, everything was business as usual.
The European Central Bank loaned more than $130 billion in overnight funds to banks at a bargain rate of 4 percent.
The amount dwarfed the $24 billion that the Federal Reserve - whom critics contend has been slow to act amid stock volatility, dwindling credit and growing mortgage woes - lent to banks.
A New York Federal Reserve official called the move ''pretty much standard practice.'' The official asked not to be named because of market sensitivity.
The Fed's move brought the Fed Funds rate, the rate at which banks lend each other money overnight, back down to 5.25 percent after it was driven higher earlier in the day by a rush by banks to stockpile cash.
The ECB's overnight funds were quickly swallowed by parched banks. Its action came after French bank BNP Paribas SA announced the suspension of three asset-backed securities funds, saying it could not value them accurately. That sent stocks lower in Europe and the United States as investors sought safer havens such as Treasurys.
Analysts and economists were surprised by the move, however, with some seeing it as evidence that the problems in subprime lending are spilling into the general economy and others as a case of the European Central Bank stepping in where the Fed has not.
''The ECB tender versus Fed inaction reflects differences in U.S. and European approaches to managing economies,'' said Peter Morici, an economics professor at the University of Maryland.
The European Central Bank, which controls monetary policy for Germany, France and 11 other nations in the euro zone, said it allocated $130 billion in the one-day quick tender to ensure orderly market conditions. Forty-nine bidders took part in the tender.
In the United States, the Federal Reserve Bank of New York added $24 billion of temporary reserves to the banking system through two regular market operations, a spokesman said.
The most recent repurchase agreement was on Wednesday, the day after the Fed held its key interest rate steady at 5.25 percent, and had added $8.75 billion in temporary reserves.
''Today's events show that either the Fed committed a large policy error on Tuesday, or that both the Fed and the ECB are themselves more in the dark on the problems that lie underneath the surface than are investors in the financial markets,'' Tony Crescenzi of Miller Tabak said in a research note.
The Fed met Tuesday to discuss monetary policy and announced after the meeting that inflation, not credit problems, remained its major concern.
The ECB's move shows their difference in approach, analysts said.
''Europeans are inherently more activist, but the ECB is taking a big risk. Efforts to prop up markets can fail and actually create a crisis in confidence,'' Morici said.
Defaults on subprime loans, or those made to people with poor credit, have climbed sharply in the United States in recent months and have triggered concern about the impact on credit markets worldwide. But until the past few weeks, most of the banks and companies affected were in the U.S.
''There is definitely a liquidity crunch going on,'' said Andrew Wilkison of Interactive Brokers in Greenwich, Conn. ''But where it is surfacing is unusual. I don't think many investors expected it to turn up from the corners of the Rhine to central Paris.''