Christine Lagarde, President of the European Central Bank (ECB), addresses a news conference March 16 ahead of the bank’s current Council meeting.
Image: dpa
The big central banks intervene: In view of the turbulence in the banks, the ECB, Fed & Co. announce joint action to strengthen the supply of liquidity.
DIn view of the recent banking turmoil, the major central banks have intervened to improve the supply of the dollar to the financial sector. The European Central Bank (ECB) and the central banks of the USA, Japan, Great Britain, Switzerland and Canada are involved in the coordinated action, the ECB announced late on Sunday evening.
The existing agreements on dollar currency exchange would be used to strengthen the supply of liquidity. The central banks agreed to conduct the seven-day transactions daily instead of weekly. That should start this Monday. Daily operations are expected to continue until at least the end of April.
The network of swap lines between these central banks is an important system that serves as a liquidity backstop, according to the ECB. This is ready to reduce tensions on the global financial markets. It helps to mitigate the impact of such strains on the supply of credit to households and businesses both at home and abroad.