GLOBAL MARKETS-Global stocks, euro jump on ECB move

* ECB move to boost dollar funding bolsters risk appetite

* Investors dump safe-haven gold, U.S. government debt

* Wall Street gains for fourth day

* Crude oil climbs as move seen preventing recession (Adds close of U.S. markets)

By Herbert Lash

NEW YORK, Sept 15 (Reuters) - Global stocks advanced for a third straight day and the euro rose sharply on Thursday after the world's major central banks moved to ease funding for European banks in a coordinated effort to corral Europe's debt crisis.

The announcement by the European Central Bank, the U.S. Federal Reserve and other central banks to increase dollar funding for banks indicates authorities are making a concerted effort to snuff Europe's debt crisis after weeks of market turmoil.

The funding move comes three years to the day after Lehman Brothers filed for bankruptcy, an event that marked the depths of a financial crisis that still ravages global markets.

"This is good for the European banking system, so we're seeing a push higher in equity prices," said Rick Klingman, a Treasury trader at BNP Paribas in New York.

"The ECB-Fed joint announcement is causing a risk-on type trade because they're providing dollar funding through year-end."

European shares rose more than 2 percent and the euro jumped over 1 percent after the ECB unveiled three-month dollar loans in a move to prevent money markets from freezing up. On Wall Street, stocks rose more than 1 percent. [ID:nL5E7KF2LG]

The announcement sharply boosted bank shares in the euro zone <.SX7P> and on Wall Street and cut aversion to risk. The price of safe-haven government debt and gold fell.

In another move to address the crisis, U.S. Treasury Secretary Timothy Geithner will discuss with European finance ministers the possibility of leveraging the euro zone's bailout fund to make it more effective, sources said on Thursday. For details see [ID:nL5E7KF1CX].

The euro rose as high as $1.3937, according to electronic trading platform EBS, before easing a bit to trade up 1.1 percent.

The FTSEurofirst 300 <.FTEU3> index of top European shares closed up 2.1 percent, and has now gained 6.2 percent since touching a two-year low on Tuesday. Euro zone banks <.SX7E> rose 6.3 percent, with BNP Paribas , France's biggest listed bank, up 13.4 percent,

The ECB move, which came a day after the notion of common euro zone bonds was again floated and European leaders pledged support for Greece while insisting on austerity measures, was still unlikely to relieve market stresses, analysts said.

Analysts said there has been a funding crunch in Europe for months, with dollar-rich U.S. banks reportedly requiring 130 percent collateral for a loan to European banks.

"The swap agreements alleviate funding concerns in the short term, but it doesn't tackle the underlying problems, nor is it a solution to the European crisis," said Lauren Rosborough, currency strategist at WestPac in London.

On Wall Street, the Dow Jones industrial average <.DJI> was up 186.45 points, or 1.66 percent, at 11,433.18. The Standard & Poor's 500 Index <.SPX> was up 20.43 points, or 1.72 percent, at 1,209.11. The Nasdaq Composite Index <.IXIC> was up 34.52 points, or 1.34 percent, at 2,607.07.

The S&P financial index <.GSPF> jumped 2.6 percent, with Bank of America up 4 percent.

In a sign of difficulties ahead, German Chancellor Angela Merkel bluntly rejected euro zone bonds as a solution to Europe's sovereign debt crisis. [ID:nL5E7KF1CX]

There was also no clear sign from a conference call of German, French and Greek leaders on Wednesday that a stalemate over Athens' next bailout payment had been broken. [ID:nLDE78D090]

Analysts said the gains in the euro could be short-lived as the announcement did little to calm investors' fears of a Greek debt default.

Bund futures fell and Greek credit default swap prices showed an above 90 percent chance of a default, according to Reuters calculations based on Markit data.

Investors pushed aside a fresh spate of disappointing data that showed new claims for U.S. jobless aid unexpectedly rose last week and factory activity in the mid-Atlantic regin contracted early this month. The data backed the view the Federal Reserve would move soon to boost economic growth. [ID:nS1E78E0U8]

The price of the 30-year U.S. Treasury bond fell more than a point as the prospect of a long stretch of loose monetary policy coupled with higher inflation prompted investors to dump long bonds.

The 30-year bond was last off 1-26/32 in price to yield 3.37 percent. The benchmark 10-year U.S. Treasury note fell 27/32 to yield 2.09 percent.

Crude oil rose, buoyed by the rally in equities, the weaker dollar and the improved risk appetite. [ID:nL3E7KF0IJ]

Brent crude for October delivery , which expired Thursday, traded up $2.94 to $115.34 a barrel. The more heavily traded November contract gained $2.65 to settle at $112.30 a barrel.

U.S. crude oil for October rose 49 cents to settle at $89.40.

The December contract for U.S. gold futures fell $41.60 to $1,784.40 an ounce in heavy trade. (Reporting by Wanfeng Zhou, Gertrude Chavez-Dreyfuss, David Sheppard and Emily Flitter in New York; Writing by Herbert Lash; Editing by Leslie Adler)