On Sunday evening, March 19, 2023, at 5:00 pm ET, the Board of Governors of the Federal Reserve System, along with several central banks including the Bank of England, Bank of Canada, Bank of Japan, European Central Bank, and Swiss National Bank, announced the US dollar announced coordinated measures to enhance liquidity provision through the Liquidity Swap Line Standing Arrangement. The announcement was made in response to the banking crisis that began with the collapse of three U.S. banks and spread internationally.
Disruptions in the banking industry lead to coordinated actions to strengthen liquidity
Before Wall Street opened on Monday and prior to the next Federal Reserve meeting, the U.S. central bank, along with five other major central banks, announceddecisive action to add liquidity to the financial system. Participating were the Bank of England, the Bank of Canada, the Bank of Japan, the Swiss National Bank, and the European Central Bank (ECB). In fact, all participating central banks issued similarpress releasesregarding the new measures.
“In order to increase the effectiveness of swap lines in the supply of U.S. dollar funds, the central banks that currently provide U.S. dollar operations have agreed to increase the frequency of their seven-day maturity operations from weekly to daily.” and is detailed in the Federal Reserve’s announcement.” These daily operations will begin on Monday, March 20, 2023, and will continue until at least the end of April.”
So the central bank literally said – sort of –
“Steady lads, deploying more capital”
.
– sol poor｜$BONK enjoyeerr｜🔥💃 (@DeChDAO) . March 20, 2023
The central bank’s latest plan is being talked about on social media and forums as many believe the monetary tightening policy is over; Arthur Hayes, founder of Bitmex, tweeted about the situation,, It’s All Over!!!! This is what happens when no one wants to hold USD in banks that can’t borrow from the Fed using the #banktermfundingprogram, I don’t see how they can raise rates when the Fed is handing out dollars to their buddies. Cut cut cut”
from tightening to easing
. The turmoil in the banking industry began with the collapse of Silicon Valley Bank and Signature Bank. The U.S. Federal Reserve announced plans to round up all uninsured depositors of both banks. Shortly thereafter, the major Swiss bank Credit Suisse showed signs of serious weakness and borrowed 50 billion francs from the Swiss National Bank. Swiss authorities then orchestrated an emergency takeover of Credit Suisse by UBS, which bought the financial giant for 3 billion Swiss francs ($3.2 billion).
From SVB to a medium-sized U.S. bank (First Republic), a global systemic bank (CS), and the coordination of all central banks…
This escalated and escalated
– Mid (@Elm)
