Central banks cut rates to contain crisis

LONDON (Reuters) - The Federal Reserve led a global round of emergency interest rate cuts on Wednesday in an effort to contain the worst financial crisis since the 1930s.

The Fed said it was cutting its key federal funds rate by 50 basis points to 1.5 percent. China, the European Central Bank (ECB) and central banks in Britain, Canada, Sweden and Switzerland also cut rates in the coordinated response which analysts had been demanding.

Britain had earlier offered to pump at least 50 billion pounds ($87.2 billion) into its biggest retail banks to help them survive the crisis.

British Prime Minister Gordon Brown said the global financial market had ceased to function after bad debts stemming from a collapse in the U.S. housing market poisoned the system.

Hong Kong had earlier followed Australia's lead in slicing a full point off its interest rates amid increasingly strident calls for a coordinated, global monetary policy response.

The U.S. approved a $700 billion package last week to rescue its ailing banks -- although its stock market has continued to plunge -- and governments across the globe are now pushing ahead with their own emergency measures.

(With reporting by Reuters global bureaus; Editing by Janet McBride)

($1=.5733 Pound)