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By Stella Dawson and Jan Strupczewski WASHINGTON/BRUSSELS | Fri Jun 15, 2012 12:57am EDT | Reuters

Central banks from major economies stand ready to take steps, including coordinated action,
to stabilize markets as world economies prepare for a possible financial storm or public panic after
cliffhanger elections in Greece this weekend.

Britain announced it would flood its banking system with cash as the euro zone's crisis casts a
"black cloud" over the nation's economy.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, said that central
banks were ready to take steps to stabilize financial markets - if needed - by providing liquidity and
prevent any credit squeeze after Sunday's election.



Canada is "ready to act" if the situation takes a serious turn for the worse or there is "an external
shock," Andrew MacDougall, a spokesman for Prime Minister Stephen Harper, said on Thursday.

The Bank of Japan left policy unchanged on Friday following a two-day meeting, keeping its financial
firepower in reserve in case it is needed after the Greek election. China and India are both working on
contingency plans, officials and sources said last week.

In Europe, authorities also laid plans for tackling turmoil such as if Greeks emptied their bank accounts
should the SYRIZA party, which has promised to tear up the country's bailout deal with the EU and
the IMF, score a decisive victory on Sunday.



READY FOR THE CASH TO FLOW

G20 officials said that central bankers are ready to ensure enough cash is flowing through the financial
system if severe market strains emerge after the elections in Greece, which coincide with votes in Egypt
and France. Depending on the depth of any turmoil, an emergency meeting of ministers from the Group
of Seven developed nations could be held on Monday or Tuesday during the Mexican summit of leaders
from the G20, which includes major emerging economies such as China.



Euro-zone finance ministers are scheduled to hold a teleconference on Sunday evening to discuss the
poll outcome.

One euro-zone official said that the main concern, if SYRIZA overwhelmingly won the election, was the
risk of large capital outflows from Greece if depositors worry their savings in euros could later be frozen
or converted into new drachmas.

Spain and Italy, under increasing fire in Europe's debt crisis, earlier promised new measures to repair their
public finances as their soaring borrowing costs raised new alarm.

But German Chancellor Angela Merkel rebuffed pressure from EU partners and the United States for
Europe's most powerful economy to underwrite debt or guarantee bank deposits in the single currency area.

She warned against overstraining the resources of Europe's biggest economy, saying: "Germany is putting
this strength and this power to use for the well-being of people, not just in Germany but also to help
European unity and the global economy. But we also know Germany's strength is not infinite."