Wednesday, November 30, 2011

What Did Central Banks Actually Do Today?

Not a whole lot.  Technically they lowered the cost of liquidity swaps with foreign central banks so that European banks can swap euros for dollars and therefore have better access to dollars.  Of course, the swap lines have been open and no banks seem to be accessing them...

Below is a time series of the liquidity swap line of the Fed's balance sheet.  Compared to $580B in swaps in 2008, today there are just $2B.

Click to Enlarge

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