Washington - XINHUA
The Federal Reserve, the US central bank, said on Thursday that it and five other major central banks would convert their temporary bilateral liquidity swaps into standing arrangements. "The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced on Thursday that their existing temporary bilateral liquidity swap arrangements are being converted to standing arrangements, that is, arrangements that will remain in place until further notice," the U.S. Fed said in a statement. "The standing arrangements will constitute a network of bilateral swap lines among the six central banks. These arrangements allow for the provision of liquidity in each jurisdiction in any of the five currencies foreign to that jurisdiction, should the two central banks in a particular swap arrangement judge that market conditions warrant such action in one of their currencies," the statement noted. The existing temporary swap arrangements, which were established during the global financial crisis, have helped to ease strains in financial markets and mitigate their effects on economic conditions, said the Fed, which added that the standing arrangements will continue to serve as a prudent liquidity backstop.