Central Banks Take Joint Action to Ease Debt Crisis
By BINYAMIN APPELBAUM
NYT
Published: November 30, 2011
WASHINGTON — The Federal Reserve moved Wednesday with other major central banks to buttress the financial system by increasing the availability of dollars outside the United States, reflecting growing concern about the fallout of the European debt crisis.
The banks announced that they would slash by roughly half the cost of an existing program under which banks in foreign countries can borrow dollars from their own central banks, which in turn get those dollars from the Fed. The loans will be available until February 2013, extending a previous endpoint of August 2012.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said in a statement.
The participants in addition to the Fed were the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank.
The move makes clear that regulators increasingly are concerned about the strain that the European debt crisis is placing on financial companies. European banks in particular are facing difficulty in borrowing through normal channels the money that they need to fund their obligations.
(More here.)
NYT
Published: November 30, 2011
WASHINGTON — The Federal Reserve moved Wednesday with other major central banks to buttress the financial system by increasing the availability of dollars outside the United States, reflecting growing concern about the fallout of the European debt crisis.
The banks announced that they would slash by roughly half the cost of an existing program under which banks in foreign countries can borrow dollars from their own central banks, which in turn get those dollars from the Fed. The loans will be available until February 2013, extending a previous endpoint of August 2012.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said in a statement.
The participants in addition to the Fed were the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank.
The move makes clear that regulators increasingly are concerned about the strain that the European debt crisis is placing on financial companies. European banks in particular are facing difficulty in borrowing through normal channels the money that they need to fund their obligations.
(More here.)
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