* Global equities rally on growing optimism over Europe
* Treasuries fall on easing of Greek debt default fears
* Euro slips on profit-taking after this week's rally (Updates prices)
By Herbert Lash
NEW YORK, Sept 16 (Reuters) - Global equities rose for a fourth straight day on Friday but the euro slid as optimism European leaders are getting a grip on the region's debt crisis was offset by fears that Greece was still at risk of default.
While gains in the equity market suggested risk aversion has dissipated, a sharp decline in French and Italian banking stocks, along with the euro's slide, indicated caution was still strong in markets.
Fears that Greek fiscal woes would bring down the European financial system had eased on Thursday after the world's leading central banks agreed to boost short-term dollar funding for banks in Europe that have faced a dollar shortage.
"There's a view that the global leaders are coming up with a plan for a soft landing on Greece," said Scott Graham, head of Treasury trading at BMO Capital Markets in Chicago.
Even so, some equity traders said there were expectations that credit rating agency Moody's Investors Service might cut Italy's debt rating after the market close, sentiment that dragged on bank shares.
MSCI's all-country world equity index <.MIWD00000PUS> rose 0.6 percent, while the FTSE Eurofirst index <.FTEU3> of top regional European shares closed up 0.6 percent to end at 937.85 points.
An early rally in banks stocks lost steam, however, and the
STOXX Europe 600 Banks index <.SX7P> finished up rose 0.3
percent. BNP Paribas
Wall Street rose, but U.S. bank stocks fell.
After midday, the Dow Jones industrial average <.DJI> was up 44.99 points, or 0.39 percent, at 11,478.17. The Standard & Poor's 500 Index <.SPX> was up 3.14 points, or 0.26 percent, at 1,212.25. The Nasdaq Composite Index <.IXIC> was up 8.54 points, or 0.33 percent, at 2,615.61.
The S&P 500 financial index <.GSPF> fell 0.6 percent, and the KBW Bank index <.BKX> shed 1.1 percent.
Next week's meeting of the Federal Reserve also came into view, with speculation policy makers might provide further stimulus to the economy.
"The news yesterday that central banks are offering dollar liquidity to European lenders is regarded as being the start of an accelerated process in addressing the debt crisis," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
"With the Fed meeting next week, (the ECB news) sort of served as a threshold. Investors are now thinking that we have entered a process towards additional monetization."
Markets shrugged off a survey that showed even though U.S. consumer sentiment inched up in early September, Americans remained gloomy about the future with a gauge of expectations falling to the lowest level since 1980. [ID:nS1E78E0P2]
U.S. Treasury securities edged higher, reversing losses after gains in the major U.S. stock indexes eased.
The benchmark 10-year U.S. Treasury note
Brent crude traded near break-even after earlier gains.
The November contract for Brent crude
U.S. crude
The euro eased as investors locked in profits after this week's rally. [ID:nS1E78F0EY]
The euro