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Central banks prep for action

Thursday, June 14, 2012 - 01:55

June 14 - A surge on Wall Street as sources say central banks are prepared to take action after the Greek election. Bobbi Rebell reports.

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PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL Stocks surged - with the Dow up over 200 points at one point after G20 officials told Reuters that central banks are preparing to take action to protect the financial markets if it's needed after this weekend's Greek election. A senior official cautioned that the election will not provide "the definitive signal of what happens next" in the euro zone debt crisis. After that news came out, British Finance Minister George Osborne said the Bank of England and the country's government will use new monetary policy tools to shore up their economy in the wake of the euro debt crisis. Robert Brusca, Chief Economist at Fact & Opinion Economics: SOUNDBITE: ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "I think while we all hope that Greece is going to make the right decision and it's going to be a clear decision, I'm not clearly convinced that in the aftermath of the elections come early next week that we're really going to feel a lot better about things." The head of the new Systemic Risk Council, former FDIC Chairman Sheila Bair, says U.S. banks need to focus on their investments, including their exposure to Europe: SOUNDBITE: SHEILA BAIR, FOUNDER, SYSTEMIC RISK COUNCIL (ENGLISH) SAYING: "I think they should be preparing liquidity and they should be making sure that they understand at least the exposure they have in Europe to a major default in Europe." The news of possible coordinated central bank action boosted stocks- sending US shares higher. That overshadowed economic data. The number of Americans filing new claims for unemployment benefits rose unexpectedly last week. A separate report showed consumer prices had their biggest drop in three years. Foreclosure starts were up for the first time in more than two years according to RealtyTrac. European stocks closed mostly lower ahead of talk of action to protect the financial markets- as risk-averse investors sat on the sidelines ahead of Sunday's Greek election. Bobbi Rebell, Reuters.