The ECB has announced a dollar-based liquidity operation to last through the end of this year so that European banks can access dollar liquidity that they have been shut-out of by the market.

The Fed, ECB, BOE and BOJ will all participate. A similar facility was put in place in 2008 after the Lehaman crash.

I guess the crisis is worse than we thought…

The knee-jerk reaction has been to buy EUR/USD as the funding crisis for European banks has been plastered over but the root causes remain. Not very bullish in the long-term.

European bank shares are rising as short-term liquidity concerns ease.