Azad Zangana, European Economist at Schroders comments on today’s announcement from Central Banks on US Dollar swap-lines: ...
Azad Zangana, European Economist at Schroders
Sign up for our weekly Newsletter and receive the latest ETF and ETC news.
Click here to register for your free copy
“Earlier today, the European Central Bank in conjunction with the Federal Reserve, the Bank of England, the Swiss National Bank, and the Bank of Japan announced that they would be providing additional US Dollar denominated liquidity to European Banks.
“Fears had been mounting in across the world that European banks may struggle to continue to access money markets through the rest of the year. Despite having unlimited liquidity available to them from the European Central Banks, international investors had become concerned that European banks were actually struggling in US dollar markets. The ECB had previously opened Euro-US dollar swap lines, but this was seen as insufficient by markets.
“The new coordinated action means European banks will now be able to borrow in US dollars for 3-month periods, and will have 4 opportunities – guaranteeing liquidity until August 2012. The new loans are expected to offer only a small discount relative to the current market cost of borrowing, but they will provide investors re-assurance that the ECB is committed to providing liquidity, along with the other central banks involved.”
Important Information:
The views and opinions contained herein are those of Azad Zangana, European economist, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. For professional investors and advisers only. This document is not suitable for retail clients. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Schroders has expressed its own views and opinions in this document and these may change. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Issued by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA, which is authorised and regulated by the Financial Services Authority. For your security, communications may be taped or monitored.
Source: ETFWorld – Schroders
Subscribe to Our Newsletter
