The European Central Bank said Wednesday it would make as much as $20 billion in U.S. dollars available to European banks.

The move -- coordinated with the U.S. Federal Reserve, Bank of England, Bank of Canada and Swiss National Bank -- would seek to reduce "elevated pressures" in credit markets, said the ECB, responsible for monetary policy covering the 13 member countries of the eurozone.

The ECB will auction the money in conjunction with a similar auction the Fed will conduct Monday, followed by another auction Dec. 20, the ECB said.

The central bank will get up to $20 billion in dollars from the Fed "by means of a temporary reciprocal currency arrangement," the ECB said.

The Swiss National Bank will also provide U.S. dollar funding with a tender auction Monday. Its auction will be worth up to $4 billion, the central bank said in Zurich.

It might later conduct additional U.S. dollar auctions, "subject to evolving market conditions," it said.

Like the ECB, it will get its dollars from the Fed through a reciprocal swap agreement. The Bank of Canada said its auction of $2 billion would be Thursday, with an auction of at least $1 billion the following Tuesday.

The Bank of England said it would increase the amount of reserves it offered at a 3-month maturity and widen the range of collateral accepted in tenders already scheduled for Tuesday and Jan. 15. // Copyright 2007 by United Press International


Publication date: 13 December 2007   

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