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ECB,FED,BOE, and BOJ Announced Coordinated Efforts To Provide Liquidity to Markets (Update)

Thursday, 18 September 2008 07:00:14 GMT  |  DailyFX Research

BoE confirmed major central bank plan of coordinated measures to address pressure in U.S. dollar lending. The BoE said USD 40B will be provided today in overnight funds, to be offered against eligible collateral, as an initial fund offering. The BoE has agreed on a swap agreement with the Fed, with the Fed providing the BoE with funding for repos. Similar action is to be taken by the ECB and SNB.

The BoJ said it will start USD fund supplying operations and that it has agreed with the Fed a swap deal of up to USD 60B. The ECB will hold a USD 40B one day tender today and will increase the liquidity in its USD 84 day operations to USD 15B and in its 28 day operations to USD 25B. Total USD funding from the euro system could rise to USD 110B. The BoE has also agreed a reciprocal swap agreement with the FED and will offer USD 40B in overnight funds against eligible collateral. The SNB offers up to USD 10B in one day repo and will raise its 28 day repo volume to a maximum of USD 8B. The ECB said banks will continue to cooperate and that the joint efforts are aimed at easing market pressures.

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