US Federal Reserve chairman Ben Bernanke and European Central Bank president Jean-Claude Trichet said Friday that efforts to resolve the financial crisis were bearing fruit and would be bolstered if necessary.

`Policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant,` Bernanke told the European Central Bank`s fifth central banking conference in Frankfurt.

Already, joint efforts `have contributed to tentative improvements in credit market functioning,` he said.

Trichet added that `the world can count on a continuation of this fruitful cooperation among central banks.`

The ECB chief said those affected by the bank`s decisions `can also count on the fact that this cooperation occurs fully in line with our respective mandates and, in exceptional times like these, can even strengthen their achievement.`

But Bernanke acknowledged that `financial markets remain under severe strain` and said that central banks, six of which carried out a joint interest rate cut on October 8, were ready to take additional coordinated action.

`Efforts by central banks around the world to increase the availability of liquidity, along with other steps taken by central banks and governments, have contributed to tentative improvements in credit market functioning,` he noted.

The Fed chief stressed the importance of wide participation in a weekend G20 conference in Washington of political leaders to hammer out ways of tackling a crisis that has spread from financial circles to the broad general economy.

But, he quipped: `You notice I made a point of coming to Germany.`

The ECB, Fed and other many other central banks have pulled out the stops in their efforts to get crucial interbank lending started again.

Money markets froze as commercial banks became uncertain that loans to each other would be repaid owing to huge losses being suffered following the collapse of the US market for high-risk, or subprime, mortgages.

Money markets determine the availability of credit for vast numbers of people around the globe, from managers trying to fund their businesses to families and students seeking mortgages and personal loans.

Since December 2007, the ECB and Fed have been providing dollar loans on behalf of the US central bank to eurozone banks that must refinance operations and investments in the US currency.

`To my knowledge this was the first joint action of that kind ever taken by central banks to relieve pressures in the short term funding markets,` Trichet said.

But while it was important to coordinate policies among major economies, Trichet said that `policy coordination does not mean, of course, a unique policy stance for the entire world.`

`Coordinated policy action is not a surrogate for domestic macroeconomic prudence,` he stressed.

Looking to the G20 meeting in Washington, Bernanke said: `I am particularly pleased that it will involve not just the industrialised countries, but the G20, that it will involve the Brazilians, the Chinese, the Indians, the South Africans the Australians.`

Observers `should look for the leaders to establish some general principles, to indicate a direction, and to set a timetable for further discussions for all of us in the central banks and finance ministries and other forums like the Financial Stability Forum to execute,` he added.

The FSF is a global group that includes central banks, the International Monetary Fund and other financial and regulatory bodies that was tasked with drawing up an initial response to the financial crisis.

The IMF and the Forum said Friday they would work together on providing an early-warning system in an effort to avert future financial crises.