Central banks take aim at dollar-funding shortage
Co-ordinated action from five central banks eases the pressure on dollar funding for European banks, but euro/dollar cross-currency basis swap market remains under stress
Five central banks moved together to provide US dollar liquidity on September 15, amid growing concerns that European banks were struggling to access dollar funding.
The European Central Bank (ECB), Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank announced they will conduct three sets of US dollar liquidity-providing operations, with maturities of approximately three months. The first will begin on October 12, helping European banks get through the crucial year-end period
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