The Federal Reserve said Wednesday that it joined some of the world's major central banks in a coordinated action to inject liquidity into the global financial system as the euro zone's financial crisis threatens to squeeze credit worldwide.

Joining in the move were: the Fed, The Bank of Canada, the Bank of England, the Bank of Japan and the European Central Bank, the Fed said.

"The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity," the Fed said in a statement.

The central banks agreed to lower the pricing on current temporary U.S. liquidity swap arrangements by 50 basis points from Dec. 5. The move makes more dollars available to banks at a cheaper rate, thereby easing worries about the availability of funds to banks.

The news came as Europe struggles to contain a debt crisis that threatens to pinch global credit and choke off economic growth, possibly throwing the world economy into recession.

Standard & Poor's downgraded the ratings on many of the world's major banks late Tuesday, including top U.S. banks, amid worries whether the banks can withstand another recession and a worsening situation in Europe where countries such as Greece and Italy teeter at the edge of defaulting on their debt.

Even China's mighty economy is feeling the fallout. China's central bank cut the reserve requirement ratio -- the amount of cash banks are required to keep on hand -- for commercial lenders, in an attempt to shore up its economy.

Financial markets welcomed the move. Stock futures in the U.S. pointed to a sharply higher opening. The Dow Jones industrial average appeared set to rally more than 200 points at the start of trading.

"This is something that is very welcome. This will not solve all deep-based funding problems which are due to the sovereign debt crisis. But there is an issue with dollar liquidity, especially with foreign currency and this measure addresses that," RBS economist Silvio Peruzzo told Reuters.