Tuesday, June 5, 2012

Fed Liquidity Swap Lines

Late last year the Fed re-opened some currency swap lines that it created in 2008 with foreign central banks in order to ensure that European banks would have access to dollars.  Even though Europe is back in the headlines again, it's a positive sign for the European banking system that these swap lines continue to contract.  The contraction implies that funding pressure is less acute than it was previously.

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