With Europe unable to solve its financial crisis on its own, attention has turned abroad as bankers look to Asia and the US for help. China balked; luckily for Europe, Uncle Sam is still a reliable friend. The Federal Reserve, along with several other central banks, is stepping in to save the day.
The European Central Bank said it will be joined by the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to conduct three U.S. dollar liquidity-providing operations.The action addresses an acute shortage of dollar availability as U.S. lenders withhold funds out of concern that the European banking system is overexposed to the region’s government-debt crisis.The tenders appear aimed above all at ensuring that European banks keep access to dollar funding, after months in which private-sector investors have refused to roll over existing credits.
Europeans desperately need to get their act together to save the euro, the EU, and European prosperity in general. The US can’t do this for them, but what we can do, we will.