The U.S. financial system that could have seized up with the destruction of the World Trade Center appeared to operate normally on Wednesday, aided by the Federal Reserve's injection of billions of dollars into the banking system. 

``There is no shortage of cash and no reason to expect one,'' said Federal Reserve Bank of Dallas President Robert McTeer on Wednesday. He added that automatic clearing systems were up and running as were Federal Reserve Systems' regional branches, including the New York Fed. 

With much of New York's financial infrastructure buried under mounds of rubble and U.S. bond and stock markets closed, there were fears that banks would be unable to process transactions and for corporations to get hold of sufficient funds to cover short term financing needs. 

But despite some communication problems between banks, payment and settlement systems were reported as working reasonably well given the scale of the damage in downtown Manhattan where banks, brokerage houses and fund management firms are located. 

``We expect the global economic and overall market mood over the next few days to be broadly one of 'wait and see,' although individual markets may well prove to be disorderly, despite the efforts of the authorities to provide liquidity,'' said John Llewellyn, Lehman Brothers' global chief economist. 

``Further monetary (and in the United States fiscal) policy easing now looks increasingly likely, though not necessarily immediately.'' 

Indeed, the Fed on Wednesday pumped $38.25 billion in temporary reserves into the U.S. banking system. 

``That's about 10 times the daily average,'' said Jeoff Hall, managing economist for North America Thomson/IFR, of the larger-than normal injection of funds. 

The injection of such a large amount of liquidity is seen akin to cutting short-term interest rates. 

The Fed also said it ``substantially elevated'' the discount window borrowing, the place in the Federal Reserve where banks go to borrow money at the discount rate of 3.0 percent. 

A spokesman for the New York Federal Reserve said the Fed would add more reserves as needed. Banks are normally discouraged from using the discount window except when they are desperately short of funds. 

The Federal Reserve Bank of New York said on its Web site that the bank was open and that funds and securities wires were operational. 

CP MARKET BUSINESS AS USUAL 

Short-term money markets were operating as usual, according to GE Capital, the largest U.S. issuer of commercial paper. 

Loan lenders in London said on Tuesday some corporations had tried to draw on ``swinglines,'' or same-day financing options that are typically dollar denominated and contained in standby syndicated loans to cover disruption in commercial paper markets. 

Corporates attempting to use their swinglines on Tuesday were unable to do so as the payment center, CHIPS, was located in the World Trade Center, bankers said. 

``It's business as usual for GE Capital today,'' said Mark Barber, vice president and assistant Treasurer at General Electric Capital Corp. in Stamford, Connecticut. ``We're raising somewhere in the vicinity of $12 billion of commercial paper today. The Depository Trust Co. and our issuing agents are functioning well. What we're finding is that investors are interested in placing paper into next week, in high quality names.'' 

GE Capital had nearly $123 billion of short-term borrowings as of June 30, according to an SEC filing. 

Dan Jarvis, spokesman for Ford Motor Credit Co., which in mid-August had about $23 billion in outstanding commercial paper, said: ``Basically, we are back to normal, back to business as usual here. As to how we're finding the marketplace, we're studying that as we go.'' 

Deputy Treasury Secretary Ken Dam on Wednesday said finance, commerce and banking systems ``with some exceptions,'' had continued to work, despite the attacks on landmarks in New York and Washington. 

H&R Block CEO Mark Ernst told shareholders Wednesday at the company's annual meeting that the company had some liquidity issues as a result of the attacks Tuesday because one of the company's lead banks, Bank of New York, was not operational. 

Ernst said the company was not able to fund mortgages and its financial advisor service business was also essentially shut down because of the closing of financial markets following Tuesday's attacks.