Markets suggest central banks underestimated credit crisis

WASHINGTON (AFP) - Recent turbulence on global financial markets suggests that central bankers' assurances about the credit crisis perhaps underestimated the scope of the problem.

World stock markets seesawed violently last week: While the Dow Jones Industrial Average cut its losses Friday, closing 0.23 percent lower after Federal Reserve interventions, other stock markets landed in the mud.

The FTSE 100 in London plunged 3.71 percent, the CAC 40 in Paris dropped 3.13 percent and any news of the US subprime mortgage crisis, which has begun to contaminate the world economy, sent investors running for the hills.

However, earlier in the week, economic leaders offered reassuring words to calm the markets.