The U.S. Federal Reserve, the Bank of England, the European Central Bank, and central banks from Japan, Switzerland, and Canada have all come together to provide increased liquidity to the entire global financial system. The goal of the central banks is to make it less expensive for banks to get U.S. dollar liquidity when they need to access it. In addition to the U.S. dollar support they are also taking measures to establish swap lines in other currencies as well.
Moves of this magnitude like we are seeing today, suggest that the central banks from around the world are very nervous about the uneasiness in the global financial markets. So far today, the markets are responding very positively to this news. We will have to wait and see just how long the markets will keep a positive tone.
Eric Marvin, CFP®, CRPC®
JPT113011-1940
