The former chief executive of Goldman Sachs admitted economic growth will be dented by the credit turmoil - but added that global and US economies were strong. "I have great confidence in the Fed," he said. "Markets ultimately follow the economy." He declined to answer questions about what he might be able to do at the treasury department to help the market, but did say the US treasury is considering options to help borrowers who might be about to lose their homes because of rising interest rates, but did not say what those might be. Paulson added strong economies in the US and around the world will help cushion shocks from a credit crisis that began with a wave of delinquencies in subprime mortgages, which are extended to high-risk borrowers. "Credit is being repriced, reassessed across our capital markets. As the [Federal Reserve] addresses liquidity this makes it possible, this makes it easier, for the market to focus on risk and pricing risk," he said. "This will play out over time and liquidity will return to normal when the market has a better understanding, investors have a better understanding, of the risk-return trade-off." The comments appeared to calm the markets, with London's FTSE 100 ending at 6,086 points, up 7.4 points. US trading was mixed, with the Dow down 30.49 while the broader S&P and the Nasdaq were slightly up. The treasury secretary's comments came as the Fed pumped another $3.75 billion (1.89bn) into the financial system, the latest in a series of cash transfusions that have topped more than $100bn since last week. He and Senate banking committee chairman Christopher Dodd yesterday met Fed chairman Ben Bernanke, and America's most powerful financial leaders pledged to "utilise all the tools available" to them to try and prevent US housing and credit problems from worsening. The crisis prompted a surprise half-point cut in the Fed's discount rate on Friday, and speculation remains strong that it will now cut in its main interest rate. The comments also came as new figures showed just how the mortgage troubles have hit the US savings and loan industry in the last quarter. Troubled assets - loans that are 90 or more days past due - jumped to $14.2bn, up 50 per cent from $9.5bn in the same quarter last year, the Office of Thrift Supervision (OTS) said. That is the highest level of troubled loans at OTS since 1993, with most of the problems in home mortgages. Meanwhile in London, the Bank of England revealed it has, for the first time in more than a month, granted access to a back-up loan facility - similar to the US discount window - to help banks see their way through current market unease. The Bank said it had lent 314 million through its "standing facility", which allows banks to borrow unlimited funds overnight, albeit at a penalty rate, but refused to reveal the name of the mystery recipient. Clydesdale Bank, Allied Irish Bank, Skipton Building Society, Fortis, Co-operative Bank, HBOS, Alliance & Leicester, Abbey, Nationwide, Northern Rock, Bradford & Bingley, Britannia, Credit Suisse and Yorkshire Building Society all denied the loan was made to them. The facility is made available to just under 60 banks to provide support to members when they are having liquidity problems or where a technical glitch might make lending from another bank impossible. Banks normally borrow short-term funds from other banks. However, the current market turbulence has made banks more reluctant to lend. Banks that borrow from the facility pay interest at 1 percentage point above the current Bank of England base rate. The facility was last used in July, when 109m was lent. At the end of June the Bank made overnight loans worth 4bn in one day. CENTRAL BANKS CONTINUE TO PROVIDE FUNDS THE European Central Bank (ECB) gave cash-hungry institutions extra funds in its regular weekly refinancing operation yesterday. The ECB allotted 275 billion (187bn) in one-week funds, which is 46bn more than it estimated banks need for routine business - considerably less than the extra 73.5bn the bank injected during its weekly refinancing operation last week but still showing eurozone banks remain unusually hungry for cash. Other central bank injections also aimed to calm money markets. The Bank of Japan put 800bn (3.53bn) into its market, following a 1.0 trillion infusion on Monday. The Reserve Bank of Australia bought a total of A$3.57bn (1.44bn) in securities. Japan's finance minister, Koji Omi, said he spoke by telephone with US Treasury Secretary Henry Paulson to work together closely to monitor the recent financial-market turmoil. Meanwhile, Russia's central bank hurried to buoy the weakening rouble and keep money rates stable. In a rare move, Russia's central bank sold around $4.5bn on the market to help support the rouble, traders said. It also injected 87.8bn roubles (1.7bn) into the market through two one-day securities repurchase agreements.