Chillin' out till it needs to be funded
The Swiss, National Bank, Bank of Japan, US Fed, ECB and the Bank of England announced a coordinated effort to shore up liquidity for banks and global financial institutions with a new Dollar swap lines starting December 5 at a lower rate of US overnight rate + 50 basis points. The extended facility will last till Feb 2013
“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.
Predictably, the Euro (FXE, USDEUR=X) jumped back to 1.35 levels as the five national banks seemingly follow the S&P prescription to the T soon after Standard & Poors’ announced a host of global downgrades, keeping state supported Chinese banks a notch higher
Stocks began the day up in the green after the announcement.
The initial margin for the three month facility is also down 40% to 12% from 20% even as the Dollar faces a bleak future from the oversupply engineered to keep the Global Financial system from collapsing . We found the details at MARKETWATCH