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International - Coordinated Central Bank Action to Improve US$ Liquidity
bankofengland.co.uk ^ | The Bank of England

Posted on 09/18/2008 12:35:38 AM PDT by HAL9000

Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in US dollar short-term funding markets. These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks will continue to work together closely and will take appropriate steps to address the ongoing pressures.

Bank of England action

The Bank of England will offer to lend each day US dollar funds overnight against eligible collateral. The first such operation will take place today. The amount offered in each repo operation will initially be $40bn. This amount will be reviewed on a regular basis, in consultation with the other central banks.

The US dollar repo operations will take the form of an auction. Eligible collateral will consist of securities routinely eligible in the Bank’s short-term repo Open Market Operations together with conventional US Treasuries.

The Bank of England has concluded a reciprocal swap agreement (swap line) with the Federal Reserve. Through this arrangement the Federal Reserve will provide the Bank of England with US dollar funding to facilitate these operations.

For more information please see the Market Notice published by the Bank today.

Information on related action to be taken by other central banks

Information on the actions to be taken by other central banks is available on the following websites:

Bank of Canada (http://www.bankofcanada.ca/)
Bank of Japan (http://www.boj.or.jp/en/)
European Central Bank (http://www.ecb.int)
Federal Reserve System (http://www.federalreserve.gov)
Swiss National Bank (http://www.snb.ch/)



TOPICS: Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: banking; bankofcanada; bankofengland; bankofjapan; banks; canada; centralbank; centralbanks; dollar; economy; europeancentralbank; fed; federalreserve; govwatch; housingbubble; intervention; japan; repos; swissnationalbank; switzerland; usdollar; ustreasury

1 posted on 09/18/2008 12:35:38 AM PDT by HAL9000
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To: HAL9000

my guess is that this is good????


2 posted on 09/18/2008 12:40:08 AM PDT by cherry (SP for VP !!!)
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To: cherry
my guess is that this is good????

Sounds like it to me.

3 posted on 09/18/2008 12:41:10 AM PDT by Cementjungle
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To: cherry

I’m no economist, but I’m guessing it’s good news for the short term. I’m not so sure about long-term.


4 posted on 09/18/2008 12:44:09 AM PDT by HAL9000 ("No one made you run for president, girl."- Bill Clinton)
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To: HAL9000

Press Release

Federal Reserve Press Release

Release Date: September 18, 2008

For release at 3:00 a.m. EDT

Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan, and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in U.S. dollar short-term funding markets. These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures.

Federal Reserve Actions
The Federal Open Market Committee has authorized a $180 billion expansion of its temporary reciprocal currency arrangements (swap lines). This increased capacity will be available to provide dollar funding for both term and overnight liquidity operations by the other central banks. 

The FOMC has authorized increases in the existing swap lines with the ECB and the Swiss National Bank. These larger facilities will now support the provision of U.S. dollar liquidity in amounts of up to $110 billion by the ECB, an increase of $55 billion, and up to $27 billion by the Swiss National Bank, an increase of $15 billion. 

In addition, new swap facilities have been authorized with the Bank of Japan, the Bank of England, and the Bank of Canada. These facilities will support the provision of U.S. dollar liquidity in amounts of up to $60 billion by the Bank of Japan, $40 billion by the Bank of England, and $10 billion by the Bank of Canada.  

All of these reciprocal currency arrangements have been authorized through January 30, 2009. 

Information on Related Actions Being Taken by Other Central Banks
Information on the actions that will be taken by other central banks is available at the following websites:

Bank of Canada Leaving the Board
Bank of England Leaving the Board
European Central Bank Leaving the Board
Bank of Japan Leaving the Board
Swiss National Bank Leaving the Board

http://www.federalreserve.gov/newsevents/press/monetary/20080918a.htm


5 posted on 09/18/2008 12:48:12 AM PDT by BGHater (Democracy is the road to socialism.)
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To: HAL9000
The dollar gets to live another day.

And gold is already down from its peak yesterday of $885 to $873.

When you owe the world a few hundred trillion dollars (or whatever it is), they are at your beck and call.

Power to the Debtor!


6 posted on 09/18/2008 12:53:01 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: Cementjungle

Imagine yourself in a snowstorm. Now, imagine lighting a $100 bill for warmth.

Temporary, ineffective, and a waste of money.


7 posted on 09/18/2008 12:53:39 AM PDT by sbelew
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To: BGHater
I think some of your links got confused by the "Leaving the Board" link and image. Let me try that part of your post again ...
Bank of Canada
Bank of England
European Central Bank
Bank of Japan
Swiss National Bank

8 posted on 09/18/2008 12:58:42 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: ThePythonicCow

Ouch, I didn’t catch that. Thx.


9 posted on 09/18/2008 1:00:05 AM PDT by BGHater (Democracy is the road to socialism.)
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To: sbelew
Nah - it will all make sense soon enough. Once we inflate our currency enough, then burning $100 bills for warmth will be a perfectly sensible thing to do. The pile of firewood you'll be able to get for $100 will provide less warmth than the bills themselves.
10 posted on 09/18/2008 1:00:38 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: HAL9000
Europe is up so far. Asia is responding as well, not green put surging from further in the red.

Symbol Name Last Trade Change Related Info
^ATX ATX 2,923.39 3:45AM ET Down 15.81 (0.54%) Components, Chart, More
^BFX BEL-20 2,815.40 4:01AM ET Up 26.45 (0.95%) Chart, More
^FCHI CAC 40 4,027.53 3:46AM ET Up 27.42 (0.69%) Chart, More
^GDAXI DAX 5,883.35 3:45AM ET Up 22.37 (0.38%) Chart, More
^AEX AEX General 359.06 4:01AM ET Up 2.08 (0.58%) Chart, More
^OSEAX OSE All Share 383.27 3:45AM ET Up 3.26 (0.86%) Components, Chart, More
^MIBTEL MIBTel 20,030.00 4:01AM ET Up 24.00 (0.12%) Components, Chart, More
^IXX ISE National-100 73.72 Sep 17 0.00 (0.00%) Chart, More
^SMSI Madrid General 1,151.59 Sep 17 Up 6.90 (0.60%) Components, Chart, More
^OMXSPI Stockholm General 248.80 4:00AM ET Up 0.18 (0.07%) Chart, More
^SSMI Swiss Market 6,700.63 4:01AM ET Up 46.30 (0.70%) Chart, More
^FTSE FTSE 100 4,961.80 3:45AM ET Up 49.40 (1.01%) Components, Chart, More

11 posted on 09/18/2008 1:03:01 AM PDT by BGHater (Democracy is the road to socialism.)
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To: ThePythonicCow

“The pile of firewood you’ll be able to get for $100 will provide less warmth than the bills themselves. “

Heh - I didn’t think of that angle.

Welcome to the United States of Zimberica.


12 posted on 09/18/2008 1:04:45 AM PDT by sbelew
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To: ThePythonicCow

The old joke... you owe the bank $1000, you’ve got a problem... you owe the bank $1,000,000, and the bank has the problem


13 posted on 09/18/2008 1:10:42 AM PDT by Chet 99 (http://www.mccainpalinvictory2008.com/)
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To: Chet 99

” you owe the bank $1,000,000, and the bank has the problem “

And we’re just now finding out how *big* the banks’ ‘problem’ really is......

What happens when they figure out that there aren’t enough assets in the world to settle all of the outstanding debt??


14 posted on 09/18/2008 1:19:25 AM PDT by Uncle Ike (Sometimes I sets and thinks, and sometimes I jus' sets.........)
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To: HAL9000
Wow - more free money. If you click through to the links, you see that the U.S.Treasury is providing the foreign banks billions of dollars, with which to "borrow" (like a pawn shop) securities for short terms. The amounts provided are:
Country Dollars
Canada $10 B
England $40 B
Europe $40 B
Japan $60 B
Swiss $10 B per day!

15 posted on 09/18/2008 1:22:07 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: cherry

Yes and no.

Yes, because it inject some liquidity into the US Fed on the short term.

No, because the co-ordination indicates the central bankers are starting to grasp at straws - especially the Fed. The Fed perceiving a need for this type of co-ordinated action between this many central banks means that the Fed feels the situation is starting to get away from them - quickly - and they foresee a possible need for more money in the near term than the Treasury has at its disposal to dump into the Fed.


16 posted on 09/18/2008 1:23:08 AM PDT by NVDave
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To: Uncle Ike

“What happens when they figure out that there aren’t enough assets in the world to settle all of the outstanding debt??”

Collapse or war, or both.


17 posted on 09/18/2008 1:24:54 AM PDT by sbelew
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To: Chet 99
That's Senator Everett Dirksen's line. "If you owe the bank $10,000, you have a problem. But, if you owe the bank $1,000,000, the bank has a problem..."
18 posted on 09/18/2008 1:26:49 AM PDT by ThePythonicCow (By their false faith in Man as God, the left would destroy us. They call this faith change.)
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To: ThePythonicCow

As my sleazeball ex-husband says “As long as I owe you that money, you are never broke”.


19 posted on 09/18/2008 2:53:32 AM PDT by autumnraine (McCain/Palin 08)
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To: Uncle Ike

They may be finding that out now.


20 posted on 09/18/2008 2:54:19 AM PDT by autumnraine (McCain/Palin 08)
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To: sbelew

“What happens when they figure out that there aren’t enough assets in the world to settle all of the outstanding debt??”


They already know there isn’t. What is happening now is no doubt just to keep the system afloat through the elections. Then all bets are off.


21 posted on 09/18/2008 3:44:58 AM PDT by rbg81 (DRAIN THE SWAMP!!)
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To: sbelew

“What happens when they figure out that there aren’t enough assets in the world to settle all of the outstanding debt??”


They already know there isn’t. What is happening now is no doubt just to keep the system afloat through the elections. Then all bets are off.


22 posted on 09/18/2008 3:46:55 AM PDT by rbg81 (DRAIN THE SWAMP!!)
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To: HAL9000
Isn't the best (but most painful) thing just to let what needs to happen happen so that then we can begin to rebuild? Don't you think all these attempts to prop something that is broken up will only prolong the inevitable?
23 posted on 09/18/2008 4:51:31 AM PDT by Heartland Mom (The Presidency is not an entry-level position.)
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To: HAL9000

It’s not a liquidity problem; it’s a solvency problem.

Every financial institution is insolvent and has been for over a year.


24 posted on 09/18/2008 5:15:52 AM PDT by nicola_tesla ("Life is Tough... It's Worse When You're Stupid".... John Wayne)
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To: cherry

Not if you want to avoid hyperinflation


25 posted on 09/18/2008 5:16:20 AM PDT by nicola_tesla ("Life is Tough... It's Worse When You're Stupid".... John Wayne)
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