Federal Reserve boosts flow of dollars to European Central Bank - The Washington Post

Federal Reserve boosts flow of dollars to European Central Bank - The Washington Post: The Fed will make short-term dollar loans to the ECB and other central banks through “swap lines,” swapping dollars for an equivalent amount of euros, British pounds, Swiss francs and Japanese yen. The ECB will, in turn, make those dollars available to euro-zone banks, the Bank of England to British banks, and so on, in the form of three-month loans at a fixed interest rate.

While these loans will not ease any losses the banks could suffer from a default, say, by Greece, the initiative lubricates the European financial system, preventing temporary shortages of cash from further weakening the banks and choking off growth.