Central banks want to improve dollar supply in joint action

The European Central Bank (ECB), the US Federal Reserve and other major central banks have announced a "coordinated measure" to ease dollar banking to calm financial markets. As the central banks involved announced on Sunday evening, so-called swap transactions, with which the central banks exchange currencies with each other, are to be expanded from Monday. Central banks outside the USA should be better supplied with dollars.

In addition to the ECB and the Fed, the Swiss National Bank and the central banks of Great Britain, Canada and Japan are also involved. They reportedly agreed to increase the frequency of seven-day dollar currency swaps from weekly to daily.

Swaps are an important "liquidity hedge to ease tensions in global financing markets, thereby helping to mitigate the impact of such tensions on household and corporate credit supply," the statement said. Daily operations are expected to continue until at least the end of April.

Shortly before, the major Swiss bank UBS had announced that it would take over the struggling competitor Credit Suisse for three billion francs. UBS and Credit Suisse are among the 30 banks worldwide classified as “too big to fail” because their failure would have a devastating impact on the global economy.

Credit Suisse has come under further pressure following a series of previous scandals, including the closure of two US banks, Silicon Valley Bank and Signature Bank, which had worried the financial sector. Statements by Credit Suisse's largest shareholder, the Saudi National Bank from Saudi Arabia, that it did not want to increase investments in the second-largest Swiss bank sent the price plummeting.