The Global Liquidity Bailout Arrives: World Central Banks Announce Global Dollar Shortfall Funding Resolution

Remember that dollar liquidity crunch Zero Hedge has been covering for the past month? Here is the denouement, in the form of the first global liquidity bailout of the world for 2011, on the 3 year anniversary of the Lehman collapse.

ECB Announcement:

15 September 2011 - ECB announces additional US dollar liquidity-providing operations over year-end

The Governing Council of the European Central Bank (ECB) has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year. These operations will be conducted in addition to the ongoing weekly seven-day operations announced on 10 May 2010. The schedule for these additional operations is as follows:

Tender date	Settlement date	Maturity date
12 October 2011	13 October 2011	5 January 2012
9 November 2011	10 November 2011	2 February 2012
7 December 2011	8 December 2011	1 March 2012

These will all take the form of repurchase operations against eligible collateral and will be carried out as fixed rate tender procedures with full allotment. Further information on tender procedures can be found on the ECB’s website.

Information on related announcements by other central banks is available on the following websites:

Bank of England:  http://www.bankofengland.co.uk

Bank of Japan:  http://www.boj.or.jp/en

Swiss National Bank:  http://www.snb.ch

SNB Announcement:

The Swiss National Bank (SNB) has decided, in coordination with the Bank of England, the Bank of Japan, the European Central Bank and the Federal Reserve, to offer US dollar liquidity with a term of 84 days to cover the end of the year. These tenders will be conducted in addition to the 7-day operations. The first 84-day US-dollar liquidity operation will be carried out on 12 October 2011. Further information about the US dollar operation and the technical requirements are posted on the SNB website (www.snb.ch/en/ifor/finmkt/id/finmkt_usdollars).

BOE Announcement:

In coordination with the European Central Bank, the Swiss National Bank, the Bank of Japan, and the Federal Reserve, the Bank of England is today announcing that it will conduct three US dollar tenders, each at a term of approximately three months covering the end of the year. These tenders will be in addition to the ongoing weekly 7-day tenders of dollar funding announced on 10 May 2010.

As before, these operations will be at fixed interest rates with counterparties able to borrow any amount against eligible collateral. The first tender will be held on Wednesday 12 October. Further details can be found in the Market Notice at http://www.bankofengland.co.uk/markets/marketnotice110915.pdf.

US dollar repo operations are subject to the terms of the Sterling Monetary Framework Documentation as supplemented and amended by the Supplementary Terms, which can be found on the Bank of England website at http://www.bankofengland.co.uk/markets/other/dollarrepo/index.htm. The US dollar term repo operations use the Narrow and Wider OMO Collateral pools, details of which can be found at http://www.bankofengland.co.uk/markets/other/dollarrepo/eligiblecollateral.htm.

BOJ Announcement:

The European Central Bank, the Bank of England, and the Swiss National Bank have today announced the introduction of three-month U.S. dollar funds-supplying operations covering the year end.

The Bank of Japan has so far continued to conduct weekly one-week U.S. dollar funds-supplying operations and monthly three-month U.S. dollar funds-supplying operations. In coordination with those central banks and the Federal Reserve, the Bank of Japan announces here an additional schedule for a three-month U.S. dollar funds-supplying operation covering the year end.

Further schedule will be notified as decided.

1. Operational time table

2. Auction schedule (An auction on October 18, 2011 is added)

Comments

[AldoHux_IV]

So central banks are making the same mistakes that continue to worsen the problem and now they're more coordinated in their asinine efforts.

Sounds about right-- it'd be so hilarious if it wasn't so sad and pathetic.

[Tic tock]

I really wonder how this is going to sound on the news tonight -

Worldwide, Central Banks agreed to open funding lines to troubled Banks

...that should warm the hearts and minds of the unemployed

[Bansters-in-my-...]

Remember......

Terrorist can't fail.....

[Spanish Lizard]

We won't get hyperinflation till banks start releasing the 2 trillion cash their sitting on correct?

[luigi]

Well... Geitner goes and then this... Stark must have found a horse's head on his pillow the other day: that's why he resigned...

[Ned Zeppelin]

"Eligible Collateral" Euro govt bonds will be used at full face value, no discount.

Using the tools for a liquidity problem to address a solvency problem. They really hope if they pack these debts away that someday they will be money good. 

ECB: Yucca Mountain #2. Right behind the Fed in permanent storage of toxic debt. 

[Inibo E. Exibo]

Forgive my newbie ignorance, this is stuff I generally don't follow, let alone understand, but it sure seems to me they basically just started dolling out what is vanishingly close free cash to those who happen to be attached like lampreys to the rotting corpse of a dead whale.  

What is this "eligible collateral" of which they speak?  The labor of our grandchildren?