Central Banks announce plan to give Fed access to foreign currency
Written April 6, 2009 at 10:21 AM EST by Greg Michalowski
The major central banks (Fed, SNB, BOJ, BOE and ECB)announced a plan this morning whereby the Fed would have access to swap arrangements for Euro, Yen Sterling and Swiss Francs if the need arose. The Fed would act as the conduit to US financial institutions who may not be able to cover shortfalls in foreign currency balances. This arrangement has been authorized through October 30th.
This is probably a precaution taken by the Fed and Central Banks in case of a need by a US institution. One wonders if knowledge of the stress test results to be announced later this month prompted the action, however.
The move should not have an effect on currency values.
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