U.S Fed and Other Central Banks Take Coordinated Action to Assure Dollar Liquidity
- The ECB and other central banks will provide daily 7-day US dollar operations.
- From Monday, through at least the end of April, these ordinary processes will take place.
The U.S. Federal Reserve announced that it collaborated with the Swiss National Bank, Bank of England, Bank of Canada, Bank of Japan, European Central Bank, and Bank of Canada in a coordinated effort to enhance the supply of liquidity through the established U.S. dollar swap line arrangements.
The action, which followed a deal supported by Swiss authorities to have UBS UBSG.S purchase rival Credit Suisse CSGN.S to stop its disorderly collapse, demonstrates the serious worry central bankers have regarding the recent turmoil in the financial system on both sides of the Atlantic.
The central banks that are currently offering U.S. dollar operations have agreed to increase the frequency of 7-day maturity operations from weekly to daily to increase the efficacy of the swap lines as a source of U.S. dollar financing. From Monday, March 20, 2023, through at least the end of April, these ordinary processes will take place.
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