Fed Posts Terms Of Unlimited FX Swaps With BOE, ECB And SNB

Tyler Durden's picture

Late yesterday, the FRBNY posted the full terms of the various FX swaps that it instituted as part of the bailout of the Euro, and of various French and German banks. The specifics of the rescue agreements with the BOE, the ECB and the SNB are below while the Bank of Canada and BOJ swap details are still pending. One thing we know is that all swap arrangement will have a maximum duration of 88 days. Surely at that point they will merely be rolled over as the Euro could be facing parity and various European banks will all be on the verge of bankruptcy due to the $6 trillion USD/EUR underfunded mismatch which the BIS and Zero Hedge have previously discussed. Yet a critical missing item is the full size of each specific swap, leading us to believe that the Fed's latest swap lines are limitless in size. If the expectation is that the Fed should not be constrained by how large any given swap line can get (and even in the first European bailout round each swap line had a hard ceiling), one can speculate that the Fed fully anticipates European dollar funding needs well into the trillions. Which of course would mean that the Fed's balance sheet is about to go up by 50% on behalf of rescuing Europe... And that FR banks will make double the expected $1.25 trillion in interest on excess reserves. Thank you US taxpayers.

Swap agreement with the BOE

Swap agreement with the ECB

Swap agreement with the SNB

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jkruffin's picture

Why would a swap with the BOE be opened when UK has clearly stated publicly a few days ago they will have no part in bailing out Europe?  I have been looking everywhere as well, to find where the FED has the authority to extend their balance sheet in this manner, does anyone have a link or document regarding this?  thx

plongka10's picture

So they can buy UST's I would imagine.

Duuude's picture

Ahhhhhh there's tha rub.....

Probably find something about "maintaining a stable currency"....

It's all Pixeldust.

Schwantz's picture

The Bank of Canada swap is for $30B...details here:





Bear's picture

US Taxpayers? If anyone can look at the debt upon debt and think that the US taxpayer can cover this load ... maybe a 30% VAT.

But it will only get worse soon ... Crap and Trap will soon be before Congress ... Take everything out of your IRA's this year if they don't close the door by Dec 31.

primefool's picture

Better yet move your IRA to a Roth IRA - pay the tax ( in worthless paper money). Put the Roth in real assets which will never again be taxed . If they screw with the Roth IRA rules - then - I would conclude that we are in a truly lawless society - at which point other options have to be considered.

MarketTruth's picture

Primefool, remove ALL funds from ALL IRAs no matter what it is called. Also remove ALL money market funds, as you can be locked out of those. Convert said funds/money into a hard assets you physically hold so it is away from direct government appropriations.

Anything less that doing the above is simply fooling yourself in trusting a rogue USA government or obviously manipulated stock market.


primefool's picture

I hear ya. Iam not at that point yet. As I said if they screw with the Roth rules - I will be at that point.

I hope the politicians all have exit visas and Paraguay passports at that point - but we are not quite there yet. There is a chance we'll muddle along - i have lived long enough to have seen this level of govt depravity before - remember 1971? Vietnam war etc? We survived that did'nt we? People had bank accounts and owned stocks during world war 2 - as they had to flee the Nazis. I mean the markets have survived a lot worse than a corrupt political body .

What_Me_Worry's picture

Roths are great, no doubt.  I completely expect them to change the Roth rules at some point (well into the future).

Regarding putting it in real assets, are you referring to a self-directed?  I have been researching that for awhile.  The laws do not seem to be crystal clear on that one.  Eventually I will have to coordinate with an accountant/tax attorney if I were to go that route. 

From what I have read, you cannot have physical possession of PM's in the self-directed (they must be held at custodian level).  Then, I've read that you can (but that it is possibly grey-area tax law).  IRS doesn't seem to forthcoming with making it clear, either.  I tried reading it, but its the standard gibberish.

primefool's picture

The dilemma/trap for most people over the next few years will be an inability to keep up with the rapidly dteriorating currency. Say you make smart investments to keep your purchasing power intact - well the govt will tax it. The higher inflation goes - the worse this will be. Uou'll be taxed on efectively phantom/inflationary "profits". You can do the math but over longer periods 10-20years - your investment income is much more significant than your starting capital - much more some in high inflation. So the Roth IRA is the only escape valve. But most people are not doing this because they are averse to paying out large taxes upfront . Or they dont have money to pay the large taxes upfront.

primefool's picture

The so called US taxpayer has not yet paid a penny for all the shenanigans of the past 2 years. And never will ( as for it being a burden being passed to or children and grandchildren - LOL - good one!!). They like to refer to the freshly printed money from the Fed as "taxpayer money" - it just sounds more serious - like the money actually has meaning - requires hard labor by taxpayers to produce. Its just a scam. Bennie Mae will just print as much is needed. In fact really there is no need for income taxes at all - Bennie Mae can print it up . Ther only reason there is an income tax is to create the impression that the money is real - requires real labor etc. We are close to the end game of all this wizrdry. Never forget who the key players were.

Black Swan's picture

When I first heard the theory of the powers that be wanting to crash all paper currencies in order to be in a position to then offer the world a single WORLD Currency I laughed so hard I almost wet myself. I thought to myself these are the words of a mad man and dismissed the person that told me as looney. Well HOLLY shit I think he might have had it right based on the way the worlds heading.........!!!!!!!!

Mesquite's picture

With all these 'swap lines'...hmmm..maybe building a foundation for that one unified world currency..?? (just tongue-in-cheek conjecture..)  

LeBalance's picture

personally, I did not know that hollies shit. Thanks for that insight. :)

citizen2084's picture

..of the banks, for the banks, from the people. 


Waterfallsparkles's picture

I was wondering if the 1,000 point drop in the Dow last week was the FED trying to sell its position in S&P Futures to create liquitity for the Foreign Swaps.

The 1,000 point drop in the Dow correlates with the Bail Out of Greece and the Fed Swaps.

In one of your earlier posts most of the Selling in the S&P Futures started with JPM.  JPM is the FED's Broker.  When all of the other Banks saw JPM Dumping S&P Futures they followed thinking the FED was getting out of the Market.

Thomas's picture

This is so disturbing. BTW-My math questions are now above my pay grade.

Invisible Hand's picture

Any thoughts on this:

Two previous "National Banks" analogous to th Federal Reserve Bank were kiled (by not renewing charters).

If, at some point, someone sensible was elected as President and Congress was filled with honest (I know, it is a dream) people, could the Fed Reserve Bank be "un-chartered?"

If so, who would own the assets (and liabilities) of the FED?

Just askin' (and hoping)


Cursive's picture

If, at some point, someone sensible was elected as President and Congress was filled with honest (I know, it is a dream) people, could the Fed Reserve Bank be "un-chartered?"

The Federal Reserve was created by an act of Congress in 1913.  It was passed just before the Congress recessed and only 3 members voted.  Not coincidentally, the income tax and interstate commerce commission were created by act of Congress in 1913.  The Federal Reserve can be eliminated, but it will take an act of Congress.  Unless you know of a better grass roots organization, I suggest you check out The Swarm:


cougar_w's picture

The Fed is going to become the Bank of Earth, and will be able to control other central banks via the threat of insolvency.

If this is the sole idea of the Fed, then it is treasonous.

I believe (without any evidence) that this is actually happening with sovereign collusion.

Whether the entire crisis was created or not to serve this end is less important than understanding that this is most certainly the desired outcome. It might not the be NWO, but it is a global banking and a unified monetary base, based on the dollar.

I don't like it one bit. I do not want a global economy based on the needs of bankers, because the need of every banker is to control all the money in the world. Through that, they control everything else, and become monarchs.

Though on the up-side, having a King means you know exactly who you need to eat first.

BlackBeard's picture

Paging alien lifeforms.  Earth needs a bailout.

RockyRacoon's picture

No aliens needed.  The Earth has been providing already.  She has yielded the perfect form of money and it will be embraced by the enlightened.  Problem is the short institutional memory of our higher-order functionaries.   They forget the lessons already learned.   Our salvation has always been the same -- and the chart is looking pretty good right now.