Guess Which Two Banks Just Used Up $430 Million In Fed USD Swap Lines After A Month-Long Quiet Period
Yes, that's right - the good old ECB, which had not used the Fed's swap lines in over a month, has come back with a thud, thanking US taxpayers for their generosity. The ECB just announced that it allotted $430 million in its 7-Day USD operation to two banks, for whom the dollar shortage is once again all too real and coupled with the scarcity in EUR we have been discussing over the past month: one wonders just how positioned these banks are if they have allegedly neither USD nor EUR capital in hand. This also means that when the Fed announces its H.4.1 update this Thursday it will show an increase in swap lines with the ECB (and possibly other banks) by $430 million.
As per the announcement, two banks were responsible for bidding up $430 million in 7-Day "liquidity providing" swap lines. This is in addition to the $1.032 in outstanding 84-day swaps. We wonder just which two banks, and certainly stress test survivors, were instrumental in this latest indication of the liquidity deterioration in Europe.