Fed cuts interest rate on greenback swaps

© Scanpix/AFP

Federal Reserve lowered interest rate on US dollar swaps to ease funding for European financials. Fed cut interest rate from 100 b.p. to 50 b.p. and extended the program to February 2013. Fed's action is an attempt to ease pressure in the world's markets and stimulate central banks' capability to back international financial system. Federal Reserve will cooperate with 5 leading banks including Bank of England, Bank of Japan, Swiss National bank, Bank of Canada and ECB.