The US Federal Reserve announced that it has joined the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank in a coordinated action to enhance liquidity provision through dollar swap lines arrangements.
The move followed an agreement brokered by Swiss authorities to have UBS buy rival Credit Suisse to prevent its collapse, and signals central bankers’ intense concern regarding recent turmoil in the financial system in Europe and the United States.
“To improve the effectiveness of swap lines in providing dollar financing, central banks that currently offer dollar operations have agreed to increase the frequency of seven-day maturities from weekly to daily,” the Federal Reserve said in a statement, along with statements from the five other central banks.
The council said operations would begin on Monday and would continue at least until the end of April.
