FRANKFURT (AFP) - World central banks took unprecedented action Thursday to flood desperately tight money markets with dollars as investors worried who the next victim of the global financial turmoil could be. The US Federal Reserve led the charge to relieve "elevated pressures" in global markets by offering 180 billion dollars and promising more. Central banks have now spent more than 600 billion dollars this week to avert a global system failure. In addition, the Fed rescued US insurance titan AIG with 85 billion dollars, having allowed Lehman Brothers bank to fail. The Fed was joined by the European Central Bank with the British, Japanese, Swiss and Canadian banks in offering to swap currencies for dollars, taking the total to some 300 billion dollars on offer. The US Treasury also announced plans Thursday to raise 100 billion dollars in a new issuance of debt to help support the Fed's actions. The Fed's joint efforts with the other central banks would "address the continued elevated pressures in US dollar short-term funding markets," according to a statement. The measures, "together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets." The concerted central bank action appeared to provide some reassurance for investors, with both European and US stock markets and yields on short-term government bonds on the rise. Commerzbank analyst Michael Schubert said he believed the central banks may now have a handle on the crisis " provided there are no more of what he called "upsets." "What central banks have tried to do is to smooth the very short-term money markets and if there is no additional negative information, I think they will be able to do this," Schubert told AFP. There may well be other upsets, however, with Morgan Stanley reportedly in talks to merge with US regional lender Wachovia or be bought by HSBC or China's CITIC. US thrift Washington Mutual was also at the centre of market worries. Since the credit crunch began 14 months ago, distrust about the quality of assets being offered as collateral has spread through the money markets where banks obtain short-term funds. The resulting drying up of liquidity became a drought this week with the demise of Lehman Brothers and the last-minute rescue of fellow Wall Street titan Merrill Lynch and the de-facto nationalisation of insurance giant AIG. As a result, central banks have had to step up to the plate and fulfill their traditional role as the lender of last resort, making billions available for banks to borrow to satisfy their overnight financing needs. The turmoil on Wall Street has seen investors heading for higher ground in the form of short-term government bonds, oil and gold " the classic safe haven in troubled times " and has also claimed victims outside the United States. Britain's Lloyds TSB agreed Thursday to buy rival HBOS for 12.2 billion pounds (15.4 billion euros, 21.8 billion dollars) in what is effectively a rescue for Britain's biggest mortgage lender. In Russia, where a massive sell-off forced stock markets to shut down on Tuesday and Wednesday to prevent a meltdown, President Dmitry Medvedev on Thursday ordered government support. There were also worries about Swiss banking giant UBS, which has been among the worst hit over the past 14 months, writing off as worthless 42.5 billion dollars in assets linked to high-risk subprime mortgages in the US. UBS shares rallied 10 percent Thursday, with a boost from "rumours circulating on a merger between UBS and Credit Suisse," one trader told AFP.