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, 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 U.S. sub-prime 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.
The Fed issued a serene statement that took note of the ""volatile"" markets but warning that inflation remained its top risk for the world's biggest economy.
The previous week, the president of the European Central Bank, Jean-Claude Trichet, said the market volatility ""can be interpreted as a phenomenon of normalization of risk pricing.""
U.S. Treasury Secretary Henry Paulson echoed that tone, stressing the health of the economy and saying, ""risk is being reprised.""
""For the moment, a change in monetary policies seems unlikely because the central banks view the tensions as temporary, and above all not private-sector financial problems,"" analysts at French investment bank Natixis wrote in a note to clients.
In a matter of days, however, a ""normalization of risk pricing"" turned into panic, forcing the central banks to massively intervene to inject liquidity into the markets.
For economist Frederic Dickson, of DA Davidson, the combined actions ""triggered heavy selling in the equity markets as traders interpreted these actions as a tacit admission that the current credit crisis is more severe than previously perceived and threatens the economic expansion in the U.S. and European countries.""
In addition, their interventions still may not be enough: The markets are clamoring for Fed Chairman Ben Bernanke to cut interest rates.
The Federal Open Market Committee (FOMC) has held the key federal funds rate unchanged at 5.25 percent for 13 months.
Some analysts say the Fed can only blame itself for the quagmire. By slashing interest rates to 1.0 percent in 2003 to fight deflation, the central bank flooded the markets with cheap money, which led to excessive risk-taking.
Moreover, by riding to the rescue in times of distress, as it did when the dot-com bubble burst, the Fed has encouraged bad habits among investors.
""In effect, the central bank is promising at least a partial bailout of bad investments,"" Gerald O'Driscoll, a former vice president of the Federal Reserve Bank of Dallas, wrote in a commentary in the Wall Street Journal.
""If investors come to expect that the policy will persist, then they will deliberately take on additional risk without demanding commensurately higher returns,"" he said.
Today more and more investors expect the Fed will make an urgent rate cut -- before its next planned FOMC meeting in September.
""The Fed will probably wait a few more days to see if things come under control, but they may not be able to wait that long,"" said Naroff