Fed offers unlimited support
Fed to offer dollars to Bank of England, European Central Bank and Swiss National Bank to lend to private banks.
By David Goldman, CNNMoney.com staff writer
Last Updated: October 13, 2008: 9:09 AM ET
NEW YORK (CNNMoney.com) -- The Federal Reserve announced Monday it will offer an unlimited amount of dollars to three other central banks in an unprecedented move to provide liquidity to the global banking system.
The U.S. central bank will lend dollars at a fixed interest rate to the central banks of England, Switzerland and the European Union, according to a joint statement from the banks.
The other central banks will be able to borrow "any amount they wish" in exchange for collateral. The goal is to flood the financial system with much-needed dollars.
Acting more or less like a de facto one.
One good news, though, is that its balance sheet has actually shrunk a bit lately. This takes a bit of pressure off the dollar.