By www.CentralBankNews.info Five of the world’s most powerful central banks – the Federal Reserve, the European Central Bank, the Bank of Canada, the Bank of England and the Swiss National Bank – have extended their temporary U.S. dollar and bilateral currency swap arrangements through February 1, 2014.
The swap arrangements, which were due to expire on February 1, 2013, enable the central banks to immediately provide commercial banks with liquidity, either in U.S. dollars or any of their currencies, if necessary during periods of stress in financial markets.
The Bank of Japan will consider an extension of both sets of swap arrangements at its next monetary policy meeting, according to similar statements issued by all six central banks.
Under the swap lines, each central bank can provide their own currency to the other central banks and also provide commercial banks with liquidity in U.S. and Canadian dollars, British pounds, Japanese yen, euros and Swiss francs.
The central banks have not had to draw on these swap lines, which were re-established in May 2010 in response to strains in U.S. dollar short-term funding markets.