OTTAWA (Bloomberg) - The Bank of Canada said it will buy at least C$3 billion ($2.97 billion) of "term" securities, acting with central banks in the US and Europe to ease a global credit shortage.

Central banks in the US and Europe are taking similar steps, after demand for cash sent borrowing costs climbing. The US Federal Reserve's previous attempts to ease the credit squeeze that began in August have failed to have lasting effects. One gauge watched by central bankers, the three-month dollar London Interbank Offered Rate, rose to 5.15 percent a week ago, the highest in almost two months.

"Cutting interest rates wasn't enough to solve the problems in the interbank market," said Martin Lefebvre, an economist with Mouvement Desjardins in Montreal, "so the Fed and the other major central banks had to find other ways."

The Bank of Canada will buy C$2 billion of securities today and sell them back on January 10, according to a statement on its Web site today in Ottawa. At least another C$1 billion will be purchased December 18 and sold back on January 4. The bank also said it will accept some types of asset-backed, bank- sponsored commercial paper and US Treasuries as collateral for loans made under its Standing Liquidity Facility program.