Central banks join hands to provide dollar liquidity for banks in Europe

The European Central Bank (ECB) said it will provide banks with dollars in three medium-term loan operations through the end of this year. The ECB said it had decided to launch the loans in coordination with the US Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. Banking stocks have been hurt recently on fears that they were having trouble getting short-term loans from each other. Markets and the euro currency were already up before the announcement, but were further buoyed by the news. The euro surged to a daily high of 1.3934 against the dollar before retreating slightly to 1.3887. Meanwhile US treasury securities fell on the news.

Posted in: ECB