Financial markets are poised for relief after reports of credit Suisse buyout in a rescue orchestrated by the state, while major central banks announced a co-ordinated move to shore up liquidity in the financial system.

UBS will buy rival Swiss bank credit Suisse for 3.23 billion dollars and agreed to assume up to 5.4 billion dollars in losses as it winds down the smaller peer's investment bank after a shotgun merger engineered by Swiss authorities.

Meanwhile, in a coordinated global response, central banks including the federal reserve said they would enhance dollar swap lines, helping calm investors rattled by turmoil in the banking sector.