Central Banks To Trim 7-Day $ Liquidity Ops

The Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank have made a joint announcement that they will reduce the frequency of their 7-day operations from three times per week to once weekly. The change is effective Sep 1.

According to the release, the change (made (in consultation with the Federal Reserve) is due to low take-up recently, and more broadly, the improvement in dollar liquidity conditions globally.

The banks will continue to hold weekly operations with an 84-day maturity, and "stand ready to re-adjust the provision of US dollar liquidity as warranted by market conditions. The swap lines among these central banks are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad."