Central banks in rescue effort
(19 September 2008 – Global) Globally, central banks have pumped in billions of dollars into global markets in an effort to steady nerves and restore market confidence.
The central bank of America, the Federal Reserve, as well as the central banks of Europe, Japan, Canada and Switzerland will flood the market with $US180 billion (A$225 billion).
Bank of Canada, the Bank of England, the European Central Bank (ECB), the US Federal Reserve, the Bank of Japan, and the Swiss National Bank have announced coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets.
The US Federal Reserve said that the move was designed to improve the liquidity conditions in global financial markets.
The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures, the Fed said in a release.
The Federal Open Market Committee has authorized a US$180 billion expansion of its temporary reciprocal currency arrangements (swap lines).
This increased capacity will be available to provide dollar funding for both term and overnight liquidity operations by the other central banks.
These larger facilities will now support the provision of US dollar liquidity in amounts of up to US$110 billion by the ECB, an increase of US$55 billion, and up to US$27 billion by the Swiss National Bank, an increase of US$15 billion.
In addition, new swap facilities have been authorised with the Bank of Japan, the Bank of England, and the Bank of Canada. These facilities will support the provision of US dollar liquidity in amounts of up to US$60 billion by the Bank of Japan, US$40 billion by the Bank of England, and US$10 billion by the Bank of Canada.
Bank of Canada, the Bank of England, the European Central Bank (ECB), the US Federal Reserve, the Bank of Japan, and the Swiss National Bank have announced coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets.
The US Federal Reserve said that the move was designed to improve the liquidity conditions in global financial markets.
The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures, the Fed said in a release.
The Federal Open Market Committee has authorized a US$180 billion expansion of its temporary reciprocal currency arrangements (swap lines).
This increased capacity will be available to provide dollar funding for both term and overnight liquidity operations by the other central banks.
These larger facilities will now support the provision of US dollar liquidity in amounts of up to US$110 billion by the ECB, an increase of US$55 billion, and up to US$27 billion by the Swiss National Bank, an increase of US$15 billion.
In addition, new swap facilities have been authorised with the Bank of Japan, the Bank of England, and the Bank of Canada. These facilities will support the provision of US dollar liquidity in amounts of up to US$60 billion by the Bank of Japan, US$40 billion by the Bank of England, and US$10 billion by the Bank of Canada.
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