UPDATE 9:12 AM: We have official language to back up the earlier Reuters report. An extension, rather than a new opening.From The ECB:
The Governing Council of the European Central Bank (ECB) has taken a decision, in coordination with the Bank of Canada, the Bank of England and the Swiss National Bank, to extend the liquidity swap arrangements with the Federal Reserve up to 1 August 2012. The Bank of Japan will consider the extension at its next monetary policy meeting. The swap arrangements established in May 2010 had been authorised until 1 August 2011. The Governing Council decided to continue to conduct US dollar liquidity-providing operations with a maturity of seven days. These operations will continue to take the form of repurchase operations against eligible collateral and will be carried out as fixed rate tenders with full allotment. The ECB will keep the necessity, frequency and maturity of its US dollar repo operations under review.
Swap lines have been extended for Bank of Canada, the Bank of England, the Swiss National Bank, and the ECB. Japan has not yet approved this extension, to August 1, 2012, from August 1, 2011.
Earlier: The Fed opened up and extended swap lines with the European Central Bank as pressure increased on the region’s banking system due to the sovereign debt crisis, Reuters reports.
Citing a Wall Street Journal report, Reuters says the lines have been opened to the ECB as well as central banks in the UK, Japan, Canada, and Switzerland.
Essentially, these banks were in need of more dollars to fund the demand of their respective country’s banks. The Fed supplied the means to get them those dollars.
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