European FX Swap Line Usage With NY Fed Rises To Fresh Multi-Year High As More Banks Demand More Dollars
While the disclosure of New York Fed's FX swap line usage with the ECB continues to be between 1 and 2 weeks delayed, courtesy of our ECB friends/Goldman alumni, who post swap line usage in real time, we find that in the week starting with tomorrow's settlement, the total swap line usages has risen yet again in the past week, this time to a fresh multi-year high of $89.7 billion, an increase of $400 million compared to last week, and the highest since July 2009. The reason for the increase is that the 7 Day swap line for $3.73 billion maturing tomorrow and used by 10 banks, and at a cost of 0.59% has been replaced with a fresh 7 Day swap line for $4.13 billion and at a higher cost of 0.61% and used by 11 banks. We do realize that this fact goes 100% against the prevailing flawed meme that European bank liquidity, especially in USD, has been restored (why, just look at BBA member bank self-reported 3M USD Libor - it is declining - by Jupiter, it means all is well!). For that we apologize profusely.