Six central banks announce plan to ease US dollar flows in rare joint move

Six central banks announce plan to ease US dollar flows in rare joint move

Six central banks have moved to boost the flow of US dollars to alleviate unease in global financial markets.

The statement released by the six central banks on Sunday said the move was to enhance liquidity.

“The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing US dollar liquidity swap line arrangements,” the statement said.

“The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses,” it said.

The rare joint statement comes as banking giant UBS announced on Sunday that it will buy its ailing rival Credit Suisse in a snap deal brokered by Swiss authorities.

The Switzerland-based international investment bank will pay 3 billion francs (£2.66bn) to acquire its smaller rival – far below the price that would have been expected in less urgent circumstances.

The merger comes to avoid further chaos in markets after a series of high-profile financial failures and has been welcomed internationally.

The 167-year-old Credit Suisse was brought to the brink of financial calamity last week despite a £45bn emergency loan from Switzerland’s central bank.

While fears of another 2008-style banking crisis resurfaced, experts said the big difference between the current issues of high-interest rates and 2008 is that the central banks stepped in this time to ensure there is no disorderly collapse.