Text: Federal Reserve, Bank of Canada Augment Swap Facility
(30-day measure to provide U.S. dollar liquidity) (210)
The Federal Reserve -- the U.S. central bank -- and the Bank of Canada will augment their existing swap agreement 30 days to facilitate the functioning of financial markets and provide liquidity in U.S. dollars, the Federal Reserve announced in a September 14 press release.
The announcement follows announcements of swap agreements with the European Central Bank and Bank of England.
Following is the text of the release:
Federal Reserve Washington, D.C.
September 14, 2001 For immediate release
The Federal Reserve and the Bank of Canada have agreed to a temporary augmentation of their existing swap facility in order to facilitate the functioning of financial markets and provide liquidity in U.S. dollars.
Under the terms of the augmented facility, the Bank of Canada would be able to draw up to $10 billion [$10,000 million] in exchange for Canadian dollars. The U.S. dollar proceeds, would, if necessary, be made available to Canadian banks to facilitate the settlement of their U.S. dollar transactions. This temporary arrangement will expire in thirty days.
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)