Central banks ready to face panic

Banking authorities in many parts of the world are preparing for a possible market storm or public panic after decisive elections in Greece this weekend. Central banks look prepared to pump fresh money into markets. The world's major economies are getting down to brass tacks to face a possible and not unlikely panic after cliffhanger Greek elections, should radical leftists win and cast doubt on the nation's future in the 17-member eurozone. Officials from G20 industrialized countries due to meet for a summit in Mexico next week said central banks in major economies were ready to take steps to stabilize financial markets, mainly by providing liquidity to prevent a credit squeeze. European Central Bank President Mario Draghi said on Friday the bank was willing to support the euro area, should it be required. "The ECB will continue to supply enough liquidity to banks where needed," he told reporters in Frankfurt. Canada also signaled its resolve to step into action. "Canada is ready to act, if the situation takes a serious turn for the worse or if there is an external shock," said Andrew MacDougall, a spokesman for Prime Minister Stephen Harper. Britain already announced it would flood the domestic banking system with more than 100 billion pounds ($155.43 billion, 123 billion euros), seeking to pump credit into an economy struggling to escape recession under the black cloud of the eurozone debt crisis. Eurozone finance ministers fear that victory by the radical left Syriza party would entail the risk of large-scale capital outflows from Greece, with depositors worrying that their savings in euros could be frozen and later be converted into new drachmas. European shares rose in early trading on Friday on hopes that major central banks would provide further monetary stimulus to help markets deal with the risk of a Greek exit from the eurozone. Financial stocks were among the top performers, but analysts expected the gains could be short-lived.