By Greg Robb
WASHINGTON (MarketWatch) - The U.S. Federal Reserve and other major central banks moved Thursday to extend an existing temporary U.S. dollar liquidity swap arrangement for another year. In a statement, the Fed, the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank said they were extending the dollar liquidity swap arrangement through Feb. 1, 2014. Without the action, the arrangement would have expired on Feb. 1, 2013. The banks are also extending temporary bilateral liquidity arrangements that would allow the banks to provide liquidity in any currency if needed. The Bank of Japan will consider an extension of both arrangements at its next monetary policy meeting, the statement said. Analysts have said the measures are aimed at easing strains in financial markets. Under the program, the Fed lends dollars to other central banks in return for their currencies. The foreign central banks then use auctions to lend dollars to financial institutions under their jurisdiction.
