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Currency News – Major Banks To Offer More US Dollar Loans In Event OF European Credit Crunch

In an effort to help stabilize the world financial markets and buy a little more time for everyone to figure out how to get their economies under control, major banks around the world are planning on holding three operations between now and the end of the year that would provide three month US Dollar Loans to commercial banks.

The European Central Bank, The US Federal Reserve, The Bank Of England, The Bank Of Japan and The Swiss National Bank will all work together to ensure there will be enough liquidity available and enough money for commercial banks to last to the end of the year.

Getting US Dollar loans has been very difficult of late, especially with maturity dates of longer than a few days. With a credit crunch becoming a growing possibility for the EU, everyone thought it was necessary for this action to be taken. When you add in the growing fears of a Greek default, there just didn’t seem to be any other options – no one wanted to take the risk.

Hopefully these operations will offer enough time for banks to get their dollar businesses under control and start making positive progress by the end of the year.

 

Geithner Says European Finance Ministers Need To Leverage Their Financial Recovery Plans

In the long search for solutions to Europe’s financial woes, Timothy Geithner has suggested they consider using some extra leverage, provided by the New York fed of course.

There are concerns that there will not be enough money available to cover the cost of helping the countries in trouble, including Spain, Italy, Greece, Ireland and Portugal. Everyone knows that the Eurozone wants to stick together and help solve each others problems, but if the money runs out, there really isn’t much anyone can do.

There are some risks to a plan like this, but when they are weighed against the potential benefits the plan may provide, it seems like a pretty reasonable idea. The last thing anyone wants if for the EU to fall into deeper problems and not have any money available to help each other out. That may sound farfetched, but it is definitely possible.

Geithner will speak with top European officials on Friday and discuss this possibility – while this may not be the solution they ultimately choose, hopefully there will be some progress made.

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