In a coordinated move yesterday, The European Central Bank, U.S. Federal Reserve, the Bank of England and the central banks of Canada, Japan and Switzerland announced that they would make it easier for European banks to gain access to US$ liquidity.
The central banks agreed to reduce the cost of temporary dollar loans they offer to banks — called liquidity swaps — by half a percentage point starting from next Monday.
Recently, European banks have been having trouble borrowing dollars at affordable rates due to fears about their financial health.
By having these liquidity swap agreements in place (this article gives a good explanation of how it works), The European Central Bank (ECB) will be able to get ready access to US$ to lend to European banks.
Equity markets worldwide rallied on the news. While this move solves an immediate liquidity problem, I think that the underlying solvency issues still remains intact.