European central banks joined Asian counterparts in pumping more cash into paralysed money markets on Monday, but commercial banks preferred to hoard cash rather than lend to each other as the financial crisis spread in Europe.

With the end of the financial quarter compounding liquidity tensions, the European Central Bank lent banks a massive 120 billion euros of 38-day funds in an auction, filling all but 15 percent of their bids, and promised to keep the extra cash in play until at least early 2009.

The Bank of England injected 40 billion pounds ($73.53 billion) of three-month funds on Monday to improve sterling market conditions after a weekend of bank failures in Europe and talks in the United States to seal a $700 billion bailout.

The Bank of Japan added 1.5 trillion yen ($14.2 billion) to its banking system, the ninth consecutive day it pumped in cash, before adding another 400 billion yen on a spot basis, and the Reserve Bank of Australia added A$2.7 billion ($2.2 billion).

But the interbank cost of borrowing dollars, euros, or sterling for three months rose as a string of bank nationalisations in Europe suggested the year-old global credit crisis was far from over, even though U.S. lawmakers were gearing up for a vote on the $700 billion fund to buy bad debt.

Financial group Fortis was forced to accept an 11.2 billion euro ($16.4 billion) injection by the governments of Belgium, the Netherlands and Luxembourg after talks with ECB President Jean-Claude Trichet to prevent financial contagion engulfing one of Europe's top 20 banks.

In Britain, the government nationalised mortgage lender Bradford & Bingley and sold its branches and deposits to Spanish bank Santander.

German mortgage lender Hypo Real Estate struck a last-minute deal with a group of banks for credit to resolve a refinancing squeeze while Iceland's government bought a 75 percent stake to take control of Glitnir bank whose funding position deteriorated in recent days.

"One sees now that not only American but also European banks are affected and that the crisis is after all global," said Carsten Klude, strategist at MM Warburg. "A rescue plan worth 700 billion is simply not enough to overcome the crisis for the foreseeable future. If anything, all the real economy problems will escalate as a result in the foreseeable future."

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