Central banks including the Fed, the European Central Bank and Bank of Japan pledged to deepen support for liquidity, by increasing the frequency of seven-day dollar-swap operations from weekly to daily.
“The news overnight from Switzerland has helped,” he said, though added that the central bank moves had also drawn attention to how deep troubles may run. The Asia day offered an encouraging start, with Japanese yen cross-currency swaps, a measure of non-U.S. investor demand for dollars, shrinking to minus 35 basis points or half their levels last week, in another sign of respite in market funding conditions.Still, at least two major banks in Europe are examining scenarios of contagion in the region’s banking sector and are looking to the Fed and the ECB for stronger signals of support, two senior executives close to the discussions told Reuters.