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Frankfurt/Main (German news agency) – The ECB and other major central banks surprisingly announced “coordinated measures” on Sunday evening to increase liquidity in US dollars. The existing swap agreements would be adjusted effective March 20 and the changes would remain in place until at least the end of April “to support the smooth functioning of US dollar financing markets,” according to a statement.
In addition to the European Central Bank (ECB), the Bank of Canada, the Bank of England, the Bank of Japan, the Federal Reserve and the Swiss National Bank are also involved. These central banks have agreed to increase the frequency of 7-day US dollar trades from weekly to daily. The network of swap lines between these central banks serves as an important “liquidity backstop to ease tensions in global funding markets, thereby helping to mitigate the impact of such tensions on household and corporate credit,” it said.
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