Bank of Japan: World’s six central banks to expand supply of dollars to stabilize market

TOKYO, March 20 – RIA Novosti. Six of the world’s largest regulators of banking systems have agreed to expand channels of funding the financial market with dollars to stabilize the situation after the bankruptcy of banks in the United States and the situation at Swiss Credit Suisse. expression Japanese central bank.

In addition to the US Federal Reserve System (FRS), the central banks of Japan, the Eurozone, the United Kingdom, Canada and Switzerland (Bank of Japan, European Central Bank, Bank of England, Bank of Canada and National Central Bank) agreed to increase the supply of dollar funds to the market. he did. Funding has been provided on a weekly basis so far, but now they will be able to run these operations daily, starting Monday until the end of April.

This decision stems from the fear that investors will start buying dollars due to the instability in the financial sector in America and Europe, which will lead to a sharp demand for this currency and cause chaos in the markets. “As an important safety valve to alleviate tensions in the global financial market, this measure should mitigate the impact of these tensions on loans to households and businesses,” the country’s central bank, Bank of Japan, NHK said.

Such measures have been taken only twice so far – in 2008 in connection with the bankruptcy of the American banking giant Lehman Brothers and in March 2020 in connection with the coronavirus. The decision was made before the start of trading in Tokyo to prevent quotes from falling due to investors’ distrust of the stability of financial institutions, but if the collapse did not occur, a certain drop in Nikkei quotes of about 1% after all, compared to the end of trading on Friday.

On the eve of the Swiss National Bank said that Credit Suisse bank, which finds itself in a crisis situation, will be absorbed by the country’s largest credit institution UBS, which will pay $ 3.2 billion for the assets of the rival.

Earlier, on Wednesday, Credit Suisse shares fell by a quarter on the stock market. And before that, financial watchdog Robert Kiyosaki (who had correctly predicted the collapse of Lehman Brothers) said Credit Suisse would be the next bank to fail after the bankruptcy of the Bank of America Silicon Valley (SVB). The bank also announced that it would borrow up to 50 billion Swiss francs (approximately 53.7 billion dollars) from the Central Bank. The situation with Credit Suisse in Japan has been called the “fall of spark in Europe” from the bankruptcy of American banks.