The central banks of the United States, Switzerland and other countries announced joint action on Sunday to provide more liquidity to calm markets amid a crisis of confidence in the banking system.

The emergency measure follows the acquisition of rival Credit Suisse by Swiss bank UBS in a process coordinated by the Swiss government to restore confidence in the banking system.

The institutions decided to promote “exchange lines”, mechanisms that facilitate foreign central banks’ access to the dollar.

Thus, central banks will increase the pace of operations in dollars, with the statement indicating that “these operations, which were previously carried out weekly, will become daily as of Monday, March 20, 2023. until the end of April.

And the network of swap lines is a “liquidity safety net to ease tensions in global financial markets and thereby help mitigate the effects of those tensions on the supply of loans to households and businesses,” according to central banks.

Markets have been tense since the collapse of Silicon Valley Bank amid fears of illiquidity after interest rates were raised as part of anti-inflation efforts.

The Federal Reserve (US central bank) entered into and maintained similar agreements in 2020 due to the effects of the Covid-19 pandemic.

The agreement was made between the central banks of Great Britain and Canada, the European Central Bank, Japan, Switzerland and the Federal Reserve.