Central banks announce new liquidity measures to ease the banking crisis

The Federal Reserve and other global central banks have announced new measures to improve the liquidity of the US dollar as global financial markets shake out the turmoil in the banking sector.

The world’s leading central banks said in a joint statement on Sunday that they would launch daily operations to make funding available through permanent swaps. Previously, these operations were carried out on a weekly basis.

The Fed, the European Central Bank, the Bank of England and the Swiss National Bank are also taking part in the so-called “coordinated action”. They were joined by the Bank of Canada and the Bank of Japan.

“The network of swap lines between these central banks is a set of available standby instruments and serves as an important liquidity buffer to ease tensions in global funding markets, thereby helping to moderate the effects of such tensions on the supply of credit to households and businesses. “, the central banks’ announcement states.

The move came hours after the SNB announced that its two biggest banks, UBS and Credit Suisse, would merge after intense weekend talks brokered by Swiss regulators to protect its banking system and try to prevent the crisis from spilling over into global financial markets.