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Major Central Banks Try To Stem Contagion After Credit Suisse Rescue

By Jyotsna V   ✉   | Published:   | Follow Us On Google News
rttnewslogo20mar2024

World's major central banks announced a joint effort to prevent the banking crisis from spreading after the Swiss bank UBS decided to acquire the troubled rival Credit Suisse in a deal brokered by the Swiss authorities.

Leading central banks including the Federal Reserve, the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank announced a coordinated action late Sunday to boost the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.

Central banks decided to increase the frequency of US dollar operations with 7-day maturity from weekly to daily from March 20.

These daily operations will continue at least through the end of April, a joint statement from the central banks said.

"The network of swap lines among these central banks is a set of available standing facilities and serves 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," the statement said.

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