Federal Reserve Reopens 'Dollar Liquidity Swap Facilities'

Response to strains in global market

More On Legal & Compliance

from The Advisor's Professional Library
  • The Custody Rule and its Ramifications When an RIA takes custody of a client’s funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
  • Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm.  States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
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.