Global Biz
Central banks vow to improve liquidity conditions
(Xinhua)
Updated: 2010-05-10 13:12
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WASHINGTON - In response to the re-emergence of strains in US dollar short-term funding markets in Europe, five major Western central banks announced on Sunday the re-establishment of temporary US dollar liquidity swap facilities.
The five central banks -- the Bank of Canada, the Bank of England, the European Central Bank, the US Federal Reserve, and the Swiss National Bank -- established the facilities to "help improve liquidity conditions in US dollar funding markets and to prevent the spread of strains to other markets and financial centers，" said the five banks in a joint statement.
"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," it added.
According to the Fed (the US central 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 US 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 dollars, as was the case previously," said the Fed in a separate statement.
