The Federal Reserve and other global central banks have announced fresh measures to improve the liquidity of the US dollar as global financial markets reel from turmoil affecting the banking sector.
In a joint statement released on Sunday, the world’s leading central banks said they would resume daily operations to make funds available through the standing swap line. Earlier, that operation was carried out on a weekly basis.
The Fed, the European Central Bank, the Bank of England and the Swiss National Bank were among those in what was described as “coordinated action”. They were joined by the Bank of Canada and the Bank of Japan.
“The network of swap lines between these central banks is a set of standing facilities available and serves as an important liquidity backstop to ease stress in global funding markets, thereby helping to mitigate the effects of such stress on the supply of credit to households and businesses,” the central banks said in a statement. was
The move came hours after the SNB announced that its two biggest banks, UBS and Credit Suisse, would merge at the end of a tense weekend of talks brokered by Swiss regulators in an effort to protect its banking system and prevent a crisis spreading to global financial markets.
