As the stock market celebrated Tuesday night's half-point cut in American interest rates, the Bank of England announced a plan to feed £10 billion into the hard-pressed three-month money next week, with more to come in each of the follow-ing three weeks.
It stated that it would be prepared to take a wider range of collateral, including mortgages, for this money, for which banks will be invited to bid next week and at three subsequent weekly auctions.
Even before that, shares were surging ahead, reversing the near-panic on either side of last weekend.
The 100-share Footsie index finished 176.7 points higher at 6460, the biggest one-day gain since August 17 and its highest closing number since July.
The Bank rejected suggestions that its move was a U-turn, reversing governor Mervyn King's previous stance that the Bank's support should be limited to short-term lending intended to bring down overnight interest rates.
But insiders insisted that the possibility of medium-term help to the money market was among the options outlined in Mr King's letter last Thursday to the Treasury Select Committee. Yesterday the Bank said only: "This measure is being taken to alleviate the strains in longer-maturity money markets."
Northern Rock blamed its troubles on a virtual shutdown in this market, where loans worth billions of pounds are due to mature in the coming weeks. This is believed to be one of the reasons why nervous banks have been hoarding cash and not lending to each other.
Meanwhile, minutes of the Bank's interest-setting meeting on September 5 and 6 encouraged hopes that the official rate will be cut before the end of the year.
The minutes showed that all nine members of the monetary policy committee voted to keep the rate at 5.75 per cent, while judging that risks to inflation rising unexpectedly had receded somewhat with the turmoil on financial markets and reassuring developments in Britain's real economy.
"We would certainly expect rates to come down by early next year and quite possibly by the end of this year," commented Philip Shaw, chief economist at Investec.
The minutes said the impact of the disruption in financial markets would depend on how long it lasted and how widespread it turned out to be.
Early this month the Bank judged that the turmoil was likely to be temporary and that a resulting re-pricing of credit risk was not unwelcome.
That was before Northern Rock had to seek a bail-out from the Bank - and later from the Government - as queues of nervous depositors outside its branches threatened to escalate into a wider banking crisis.
Yesterday the Government's vaguely worded guarantee to protect all bank deposits appeared to have calmed the situation for the present.
The minutes said the Bank expected that once commercial banks' balance sheets had adjusted to the new situation, demand for extra liquidity would ease and short-term money market rates would come down.
It would monitor conditions closely to see how they affected the real economy, on which there had not been much news. Spare capacity was still limited and signs of price pressures elevated.
The MPC thought consumption had been a little weaker than expected in the second quarter, while the housing market was slowing gently.
Inflation was expected to remain around the Government's two per cent target and the fall in the rate of year-on-year inflation to below the target - since sustained in the numbers for August - should help to contain price expectations, and with them pressure for higher pay increases.