Federal Reserve Reopens 'Dollar Liquidity Swap Facilities'

Response to strains in global market

More On Legal & Compliance

from The Advisor's Professional Library
  • Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices.  Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
  • Books and Records Rule Thorough and complete books and records enable RIAs to demonstrate that they have fulfilled their fiduciary obligations to clients and complied with applicable rules and regulations.
The Federal Reserve and Swiss National Bank will temporarily reopen "U.S. dollar liquidity swap facilities...designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers," according to a late Sunday night, May 9 announcement. The Fed also announced on May 10 a temporary "U.S. dollar liquidity swap arrangement with the Bank of Japan."

The Bank of Canada, the Bank of England, and the European Central Bank will all take part in the temporary liquidity setup. The arrangements are intended to ease liquidity in light of the market unease late last week as the bailout of Greek sovereign debt was announced and fear spread about which other countries, banks and markets could also be affected. Saturday May 8, the European Union announced a bailout for Greece that amounted to about $1trillion.

Reprints Discuss this story
This is where the comments go.