The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank have announced (on Sunday, March 15) a co-ordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements.

These central banks have agreed to lower the pricing on the standing US dollar liquidity swap arrangements by 25 basis points, so that the new rate will be the US dollar overnight index swap (OIS) rate plus 25 basis points.

To increase the swap lines' effectiveness in providing term liquidity, the foreign central banks with regular US dollar liquidity operations have also agreed to begin offering US dollars weekly in each jurisdiction with an 84-day maturity, in addition to the 1-week maturity operations currently offered.

These changes will take effect with the next scheduled operations during the week of March 16. The official announcement says the new pricing and maturity offerings will remain in place as long as appropriate to support the smooth functioning of US dollar funding markets.

It adds by way of background explanation that the swap lines are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.

The following statement has been issued in response by the now former Bank of England Governor Mark Carney and his replacement from today, Andrew Bailey.

Today's co-ordinated action by major central banks will improve global liquidity by lowering the price and extending the maximum term of US dollar lending operations.

These new operations will help ease strains in global funding markets, thereby supporting the supply of credit to households and businesses.

This action complements other steps being taken by central banks and other national authorities, including the comprehensive and timely package of measures launched by the Bank of England last Wednesday.

These measures, reinforced by targeted fiscal actions such as in the UK budget, will help economies to bridge the disruption from an economic shock that could prove sharp and large, but should be temporary.

Major UK banks are well able to withstand severe market disruption. They hold £1 trillion of high-quality liquid assets. The Bank of England has operations in place to make loans to banks in all major currencies on a weekly basis.

Banks have already pre-positioned collateral with the Bank of England enabling them to borrow around £300 billion through these facilities. The FPC and PRC expect that all elements of banks' capital and liquidity buffers can be drawn down as necessary to support the UK economy through this challenging but temporary shock.

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The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank have announced (on Sunday, March 15) a co-ordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements.

These central banks have agreed to lower the pricing on the standing US dollar liquidity swap arrangements by 25 basis points, so that the new rate will be the US dollar overnight index swap (OIS) rate plus 25 basis points.

To increase the swap lines' effectiveness in providing term liquidity, the foreign central banks with regular US dollar liquidity operations have also agreed to begin offering US dollars weekly in each jurisdiction with an 84-day maturity, in addition to the 1-week maturity operations currently offered.

These changes will take effect with the next scheduled operations during the week of March 16. The official announcement says the new pricing and maturity offerings will remain in place as long as appropriate to support the smooth functioning of US dollar funding markets.

It adds by way of background explanation that the swap lines are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.

The following statement has been issued in response by the now former Bank of England Governor Mark Carney and his replacement from today, Andrew Bailey.

Today's co-ordinated action by major central banks will improve global liquidity by lowering the price and extending the maximum term of US dollar lending operations.

These new operations will help ease strains in global funding markets, thereby supporting the supply of credit to households and businesses.

This action complements other steps being taken by central banks and other national authorities, including the comprehensive and timely package of measures launched by the Bank of England last Wednesday.

These measures, reinforced by targeted fiscal actions such as in the UK budget, will help economies to bridge the disruption from an economic shock that could prove sharp and large, but should be temporary.

Major UK banks are well able to withstand severe market disruption. They hold £1 trillion of high-quality liquid assets. The Bank of England has operations in place to make loans to banks in all major currencies on a weekly basis.

Banks have already pre-positioned collateral with the Bank of England enabling them to borrow around £300 billion through these facilities. The FPC and PRC expect that all elements of banks' capital and liquidity buffers can be drawn down as necessary to support the UK economy through this challenging but temporary shock.