In another attempt to ease LIQUIDITY stress, caused of course by SOLVENCY concerns (thus attacking the symptoms instead of the disease), the Fed, ECB, BOJ, BOE, SNB and BOC have lowered the interest rate on swap lines amongst them all from the $ overnight index swap rate + 100 bps to just +50 bps. The joint statement said “the purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.”
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