The world’s six largest central banks—the Federal Reserve of the United States, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank— jointly announced late Sunday they would increase the frequency of their U.S. dollar swap line arrangements from weekly to daily.
This move follows a deal supported by Swiss authorities to have UBS takeover rival bank Credit Suisse in an effort to avert a disorderly collapse, and it is indicative of the level of anxiety central bankers on both sides of the Atlantic have regarding the recent volatility in the financial system.
According to the Fed’s statement, operations will begin on Monday, March 20 and last through at least the end of April.
The monetary authorities said this would “serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses.”
