The Federal Reserve and different international central banks have introduced recent measures to enhance US greenback liquidity as international monetary markets reel from the turmoil hitting the banking sector.
In a joint assertion launched on Sunday, the world’s main central banks mentioned that they’ll launch every day operations to make funding out there by way of standing swap traces. Beforehand, these operations had been carried out on a weekly foundation.
The Fed, European Central Financial institution, the Financial institution of England and the Swiss Nationwide Financial institution are amongst these concerned in what was described as a “co-ordinated motion”. They had been joined by the Financial institution of Canada and the Financial institution of Japan.
“The community of swap traces amongst these central banks is a set of obtainable standing amenities and function an essential liquidity backstop to ease strains in international funding markets, thereby serving to to mitigate the consequences of such strains on the availability of credit score to households and companies,” the central banks mentioned in a press release.
The transfer got here hours after the SNB introduced that its two largest banks, UBS and Credit score Suisse, would merge after a frantic weekend of negotiations brokered by Swiss regulators to safeguard its banking system and try to forestall a disaster spreading throughout international monetary markets.