The European Central Bank (ECB) today announced more than $2 billion in borrowing from the Federal Reserve's currency swap line, the highest amount since the U.S. central bank reopened this facility in May 2010.
The increased borrowing comes amidst reports that the private foreign currency market is chilling, with the cost of European banks obtaining dollars on the rise. While the conditions are not nearly as bad as they became during the 2008 financial crisis, when foreign exchange markets froze and Fed currency swaps with foreign central banks rose to $586 billion, the increasing amounts are another indicator ...
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