WASHINGTON (MNI) – The following statement was issued by the
Federal Reserve, the European Central Bank, the Bank of England and the
Swiss National Bank:
In response to the re-emergence of strains in U.S. dollar
short-term funding markets in Europe, the Bank of Canada, the Bank of
England, the European Central Bank, the Federal Reserve, and the Swiss
National Bank are announcing the re-establishment of temporary U.S.
dollar liquidity swap facilities. These facilities are designed to help
improve liquidity conditions in U.S. dollar funding markets and to
prevent the spread of strains to other markets and financial centers.
The Bank of Japan will be considering similar measures soon. Central
banks will continue to work together closely as needed to address
pressures in funding markets.
Federal Reserve Actions
The Federal Open Market Committee has authorized temporary
reciprocal currency arrangements (swap lines) with the Bank of Canada,
the Bank of England, the European Central Bank (ECB), and the Swiss
National Bank. The arrangements with the Bank of England, the ECB, and
the Swiss National Bank will provide these central banks with the
capacity to conduct tenders of U.S. dollars in their local markets at
fixed rates for full allotment, similar to arrangements that had been in
place previously. The arrangement with the Bank of Canada would support
drawings of up to $30 billion, as was the case previously.
These swap arrangements have been authorized through January 2011.
Further details on these arrangements will be available shortly.
** Market News International **
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