Central Bank Liquidity Swaps - Federal Reserve Bank of New York

Central Bank Liquidity Swaps

These swap facilities respond to the re-emergence of strains in short term funding markets. They are designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions and for the Federal Reserve to deliver foreign currency to U.S. institutions if conditions warrant. At present, there is no need for the Federal Reserve to offer liquidity in foreign currencies.

Features

Why Swap Lines Are in the U.S. National Interest

We live in a global economy. Interconnected world markets mean that at times of stress, market pressures can spread from one part of the world to another, threatening the supply of credit. Currency swap lines with other central banks help relieve that stress.

Documentation

Agreements governing U.S. dollar swap arrangements with the Bank of Canada, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank were announced on May 9, 2010. Extensions of the agreements were announced December 21, 2010. Further extensions were announced on June 29, 2011, and on November 30, 2011. The only information that has been redacted from these agreements is individual contact and personal information and signatures.

	May 9, 2010 Agreement	Dec 21, 2010 Extension	June 29, 2011 Extension	Nov 30, 2011 Extension

Bank of Canada

Bank of England

Bank of Japan

European Central Bank

Swiss National Bank

On November 30, 2011, these central banks also agreed to establish temporary bilateral swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies. These swap lines are authorized through February 1, 2013. The only information that has been redacted from these agreements is individual contact and personal information and signatures.