May 10

The Federal Reserve Has Restarted The Dollar Swap Window

Posted by Kristjan Velbri | Posted in Currencies | Posted on 10-05-2010

167003t55h73f4From the Federal Reserve:

In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary U.S. dollar liquidity swap facilities. These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers. 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.

For more information on the dollar swap window, please see my research on the previous swaps:

Another Dollar Shortage? (blog post)

My dollar swap research on Scribd, available for download (full PDF)

For further information, please see the PDF for references to BIS working papers on the topic.

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