[ad_1]
Six major central banks, including the Bank of England, have taken coordinated action to boost dollar flows to help stem the crisis of confidence gripping more lenders.
The so-called swap line arrangement, involving the US Federal Reserve, Bank of Japan, European Central Bank, Bank of Canada and Swiss National Bank (SNB) aimed to “enhance the provision of liquidity” and the “smooth functioning of US dollar funding markets”.
It was hoped that the seven-day-a-week facility, which is due to run until at least the end of April, will be enough to bolster market confidence over the health of other banks, particularly US regional lenders.
Many have seen their share prices collapse in the wake of the failure of Silicon Valley Bank earlier this month, stemming from worries that the aggressive pace of interest rate rises to tackle inflation have soured balance sheets.
However, stock markets across Asia started the week in the red again – after the forced UBS takeover of Credit Suisse during the weekend – with the Hang Seng in Hong Kong falling 3%.
In Europe the FTSE 100, which had lost almost 7% of its value so far this month, shed a further 1.5% when trading began.
It, however, was led lower initially by oil stocks as prices are damaged by speculation that banking weakness will harm the global economy.
It had been hoped that the rushed takeover of Credit Suisse, engineered by the SNB and deliberately agreed ahead of the market opening, would ease concerns.
Read more business news:
SVB UK hands out £15m bonuses day after £1 sale
John Lewis may seek investment to end 100% worker ownership
The 167-year-old embattled lender was brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.
The credit line was agreed upon in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawals, prompting a request from the Swiss government for rival UBS to…
[ad_2]
