In efforts to further ease strain in the European financial markets, Europe's three biggest central banks, the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank (SNB), have jointly announced that the terms of their respective currency swap arrangements with the Federal Reserve have been altered "to accommodate whatever quantity of U.S. dollar funding is demanded." The Federal Reserve swap agreements allow global central banks to draw dollars from the Fed in order to inject funds into their own banking systems when there is an increased demand for liquidity. In order to accommodate this demand for liquidity, the Federal Reserve has authorized increases in the sizes of its temporary swap facilities in order to provide increased dollar funding in quantities sufficient to meet demand.
The ECB, BoE and SNB will conduct tenders of U.S. dollar funding at 7-day, 28-day and 84-day maturities and the counterparties to these transactions will be able to borrow unlimited amounts against appropriate collateral. These arrangements have been authorized through April 30, 2009. According to the Federal Reserve, the Bank of Japan will be considering the introduction of similar measures.