Central Bank Liquidity Swaps
These swap facilities respond to the re-emergence of strains in short term funding markets. They are designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions and for the Federal Reserve to deliver foreign currency to U.S. institutions if conditions warrant. At present, there is no need for the Federal Reserve to offer liquidity in foreign currencies.
Why Swap Lines Are in the U.S. National Interest
We live in a global economy. Interconnected world markets mean that at times of stress, market pressures can spread from one part of the world to another, threatening the supply of credit. Currency swap lines with other central banks help relieve that stress.
On October 31, 2013, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank announced that they had agreed to convert their existing temporary liquidity swap arrangements to standing agreements. The only information that has been redacted from these agreements is individual contact and personal information and signatures. U.S. Dollar Swap Agreements Bilateral Swap Agreements Bank of Canada Bank of England Bank of Japan European Central Bank Swiss National Bank Central Bank Liquidity Swaps Arrangements Archive ยป
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