No Fed Swap Lines Drawn In Prior Week

As was intimated by the ECB throughout the week by not announcing any non-Euro 7 or 84 day open market tender operations, the only question was whether Japan which has been the only country to draw on swaps over the past month, would rely on the Fed's dollar generosity. The answer is no. The Fed just announced that there were no amounts drawn on any of its CB liquidity swaps in the past week. On the other hand, with the usurious haircuts and implied costs to (ab)users of these swap lines, any time we do see usage, the pain must be intolerable. And, as Trichet pointed out earlier, the European money markets are not quite working as expected. For confirmation of European liquidity deterioration, look at the ECB's most recent discount facility usage tomorrow morning.

Comments

[Kurtieboy]

http://cfecon.blogspot.com/2010/06/david-walker-former-comptroller-us-can.html#links

CNBC David Walker interview

[MarketMonkey]

Currency crisis waning?