Swap lines are agreements between two central banks to exchange currencies. “We could see credit become more expensive and less available.”Ĭhristine Lagarde, president of the European Central Bank (ECB), told reporters Thursday that “persistently elevated market tensions” could further constrict credit conditions that were already tightening in response to rising interest rates. “If banks are under stress, they might be reluctant to lend,” Yellen said Thursday in testimony to the Senate Finance Committee. Market turmoil triggered by the second and third biggest bank failures in US history earlier this month is threatening to make it harder for people to borrow money, US Treasury Secretary Janet Yellen said last week. Credit Suisse - one of the 30 most important banks in the global financial system - was bleeding money last week after investor and customer confidence collapsed. Sunday’s statement came just hours after Swiss authorities orchestrated an emergency takeover of Credit Suisse by UBS. “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements,” the central banks said in a joint statement. ![]() The US Federal Reserve and several other major central banks announced a coordinated effort Sunday night to boost the flow of US dollars through the global financial system with the aim of keeping credit flowing to households and businesses.
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