Fed Extends Currency Swap Lines Over Eurobank Dollar Funding Concerns

US Fed extends dollar lifeline for central banks
The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access US dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for US dollars. The swap agreements were sealed in May, but as a Debt crisis and slow Economic Recovery continues to roil markets ...

EUR/CHF Continues To Make Historic Lows On Euro Zone Tensions
The euro is slightly firmer today vs. The Dollar today, but continues to make new historic lows vs. Swiss franc just below 1.25, suggesting that euro zone tensions remain strong. EM currencies continue to firm, suggesting a bit of decoupling from the euro zone crisis. However, trading ranges are fairly narrow as we head into the holiday weekend. The ECB said will lend out EUR149.5 bln in 3-month loans, and that 270 banks bid for the money. Banks need to repay EUR96.9 bln in maturing 12-month l...

ECB concerned by Irish bank bailout law
Frankfurt/DUBLIN | Mon Dec 20, 2010 7:34am EST Frankfurt/DUBLIN (Reuters) - The European Central Bank has expressed "serious concerns" that a new law in Ireland could force the Central Bank to take losses on the collateral it accepts in exchange for loans to commercial banks. Ireland parliament approved on Wednesday Legislation which will give the government extensive powers to restructure the banking sector, including the power to impose losses on subordinated bondholders and transfer deposi...

ECB concerned by Irish bank bailout law
Frankfurt/DUBLIN | Mon Dec 20, 2010 7:34am EST Frankfurt/DUBLIN (Reuters) - The European Central Bank has expressed "serious concerns" that a new law in Ireland could force the Central Bank to take losses on the collateral it accepts in exchange for loans to commercial banks. Ireland parliament approved on Wednesday Legislation which will give the government extensive powers to restructure the banking sector, including the power to impose losses on subordinated bondholders and transfer deposi...

EURO GOVT-Bund yields at record lows, peripherals lag
Fri Aug 20, 2010 9:02am EDT * Bund yields at record lows as U.S. growth fears rise * ECB Weber's Liquidity comments boost Bunds, Euribor * U.S. Treasuries favoured over Bunds * Peripheral euro Debt spreads seen wider By George Matlock London, Aug 20 (Reuters) - Longer-dated German Government Bond yields marked record lows on Friday, chasing buoyant U.S. Treasury prices after an ECB rate-setter's comments on extending funding to banks fuelled concerns about the pace of the global recovery. Aft...

Extended Fed Currency Swaps Not Sign of Fresh Concern
By Michael S. Derby The Federal Reserve ’s extension of it currency swap arrangements with other major Central Bank reflects continued unease around the state of European Financial Markets. That said, the decision to maintain the swap lines with the Bank of Canada , Bank of England , the European Central Bank , the Bank of Japan and Swiss National Bank , should be viewed more as a protective action on the part of American officials. It is not, most Economists reckon, a sign that some new ...

FOREX-Euro helped by report China will buy Portugal's debt
Wed Dec 22, 2010 7:49am EST * Euro gets lift from report China will buy Portuguese Debt * ECB tender shows heavy reliance on cheap funding * Euro hovers near all-time low vs Swiss franc (Adds detail, updates prices) By Anirban Nag LONDON, Dec 22 (Reuters) - The euro gained against The Dollar and bounced from all-time lows against the Swiss franc on Wednesday, boosted by a news report that China was ready to buy significant amounts of Portuguese Sovereign Debt. The Jornal de Negocios daily rep...

Fed Increases its Treasury Security Purchase Limit to 70%
When the Federal Reserve decided to execute a new course of Monetary Policy in November, it had a problem. It wanted to buy more longer-term Treasury securities, but it was already nearing its concentration limit for the amount of each specific Treasury Security it could hold. But since the rule was self-imposed, it lifted the limit, effectively doubling the amount it can purchase of any given Treasury Security issue. This is a pretty big change. The Central Bank had temporarily relaxed its 35 ...

Reserve Currency Roulette
Following up on our post from Friday, in which we illustrated the currency reserve and GDP market share of a number of different countries, a kind reader asked a question: “I wonder what percentage of the world’s foreign exchange reserves The Dollar had when it was redeemable among central banks in gold?” Our source for the graph, the IMF, only showed data going back to 1995, so we dug a little more and found the answer in a paper written by Barry Eichengreen of the University ...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

Fed extends dollar lifeline for central banks
The Federal Reserve Building in Washington, DC. The US Federal Reserve on T... The US Federal Reserve on Tuesday extended until August an emergency tool for other Central Banks to access dollars, amid market jitters and high demand for the safe haven greenback. The deal, which had been due to expire in January, allows the Central Banks of Britain, Japan, Canada and Switzerland, as well as the European Central Bank, to exchange local currency for dollars. The swap agreements were sealed in May,...

Fed throws euro banks a lifeline
Fed throws euro banks a lifeline Posted by Colin Barr December 21, 2010 4:19 pm For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which...

ECB's Trichet: Ireland must stick to bailout plan
PARIS | Mon Dec 20, 2010 3:50am EST PARIS (Reuters) - European Central Bank head Jean-Claude Trichet said on Monday euro zone countries must do more individually and collectively to combat the bloc's Debt crisis, and Ireland must stick "rigorously" to its Bailout plan. In a position paper published on its website, the ECB earlier expressed "serious concerns" that Ireland's rescue package could affect the institution's Liquidity operations in the euro zone. Asked if he was concerned about the ...

ECB's Trichet: Ireland must stick to bailout plan
PARIS | Mon Dec 20, 2010 3:50am EST PARIS (Reuters) - European Central Bank head Jean-Claude Trichet said on Monday euro zone countries must do more individually and collectively to combat the bloc's Debt crisis, and Ireland must stick "rigorously" to its Bailout plan. In a position paper published on its website, the ECB earlier expressed "serious concerns" that Ireland's rescue package could affect the institution's Liquidity operations in the euro zone. Asked if he was concerned about the ...

Fed extends USD swaps with major central banks
By Sakari Suoninen Frankfurt | Tue Dec 21, 2010 10:58am EST Frankfurt (Reuters) - The world's major Central Banks said on Tuesday they would extend emergency supplies of U.S. dollar funding to money markets, in a sign that authorities remain concerned about financial instability as governments grapple with Debt problems. The European Central Bank, the Bank of Japan, Bank of Canada, the Bank of England and the Swiss National Bank extended their U.S. dollar Liquidity providing operations with t...

Fed throws euro banks a lifeline
For an outfit whose policies supposedly are plunging the world into unspeakable conflict, the Federal Reserve is doing an awful lot to avoid another meltdown. The Fed said Tuesday it would extend The Dollar swap lines it provides to Central Banks in Europe, Japan and Canada in a bid to avoid a cash crunch like the ones seen to such devastating effect in 2008. Your dollars, our problem? The swap lines, under which the Fed provides foreign central Bankers with essentially unlimited stocks of doll...

Feds Bullard: Full of Self-Contradictions
James Bullard, President of the Federal Reserve Bank of St. Louis was on CNBC Monday, December 20, 2010 mostly defending the Fed’s Controversial $600 billion Treasury purchasing program (QE2) announced in Nov. What struck me as totally self-contradictory were Bullard’s statements regarding the QE2, treasury yield, Inflation expectations, and inflation, which I will outline and rebuff below. Bullard – Higher Treasury Yield = QE2 Success During the interview, aside from the ...

Cuomo suit: Ernst & Young hid Lehman losses
As predicted by several news outlets yesterday, AG Andrew Cuomo has filed suit against the Accounting Firm of Ernst & Young, charging that the outfit helped Lehman Brothers conceal the fact that it was on the verge of collapse. From the AG’s news release: The Attorney General’s Lawsuit claims that for more than seven years leading up to Lehman’s Bankruptcy filing in September 2008, Lehman had engaged in so-called “Repo 105” transactions, explicitly approved by E&Y. Th

Cuomo lashes out at Ernst & Young
Say what you like about Andrew Cuomo, he gives good complaint: E&Y substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive Accounting Fraud, involving the surreptitious removal of tens of billions of dollars of securities from Lehman’s Balance Sheet in order to create a false impression of Lehman’s Liquidity, thereby defrauding the investing public… Not only were the transactions concealed, but Lehman’s Financial Statements affirmatively, and f

Congressman Paul Says Fed Transparency Is His Goal
WASHINGTON (Reuters) - Republican Congressman Ron Paul, the new head of the subcommittee that oversees the Federal Reserve, said on Sunday he will seek greater transparency but will not be sending Subpoenas to the Central Bank chairman from Day One. Paul, a longtime critic of the Fed, will be the new chairman of the domestic Monetary Policy subcommittee of the House Financial Services Committee when the new Congress is seated in January. "Now that doesn't mean that the first week in January I...

Unrealized Losses on Payment Option Arms are still projected to be 46%
No banks haven't written all this off yet. They still have yet to write off some of this. In fact, most of the losses have yet to be realized. Yes, some tranches of this crap was sold to Fannie Mae, Freddie Mac, after which the Federal Reserve teamed up with the treasury to give the banks a "fair" price for their payment option arms. It's called Maiden Lane. When we were originating this crap at GMAC, we would often speak of the big "what if" scenario. What if POA blows up, what do we do? We ma...

U.S. Manufacturing Productivity Strong in 2009
By David Wessel The U.S. had the sharpest increase in Manufacturing Productivity — output per hour of work — in 2009 of the 19 industrialized economies for which the U.S. Bureau of Labor Statistics keeps data: 7.7%. Japan had the steepest decline, 11.4%. For the first time since the BLS began keeping tabs, both output and hours worked in Manufacturing declined in all 19 economies, a reflection of the unusually deep global Recession. Manufacturing Productivity declined in 12 of the 1...

Fed extends program to ease Europe debt crisis
The Federal Reserve extended a program set up earlier this year to ease strains from the European Debt crisis. The program, which was set to expire in January, will now run through Aug. 1, the Fed announced on Tuesday. The Fed is Lending dollars to other Central Banks in exchange for their currencies. The Central Banks can lend those dollars out to banks in their home countries to ease financial turmoil. The Fed's "swap" program was set up in May as fears rose that Greece's Debt crisis could eng...

Fed extends program to ease Europe debt crisis...
The Fed is Lending dollars to other Central Banks in exchange for their currencies. The Central Banks can lend those dollars out to banks in their home countries to ease financial turmoil. The Fed's "swap" program was set up in May as fears rose that Greece's Debt crisis could engulf other European countries. European Banks need dollars to lend to companies across the continent. European companies that have operations in the U.S. pay their employees in dollars and buy raw materials with the U.S....

Spain makes progress, but huge reforms vital: OECD
Spain has every chance of rising above its economic crisis if it enacts bold reforms, the OECD said on Monday, just as the government announced details of a Pension overhaul, the latest in a series of steps over two weeks to regain market confidence. Spain, in the eye of Financial Markets which are shunning its Debt bonds, has done much right in fighting the crisis, but must reform its labour Legislation and employment practices, the Organisation for Economic Cooperation and Development said. Th...