European Central Bank President Christine Lagarde said the institution would work on more responsive euro swap lines as it seeks a stronger international role for the currency. She made the statement during the European Parliament’s monetary dialogue on 28 September. The proposal concerns euro liquidity arrangements with other central banks. Lagarde did not announce an adopted Governing Council instrument.
Central-bank swap lines allow institutions to exchange currencies and provide liquidity to their domestic financial systems. Such arrangements can ease foreign-market funding stress and reduce the risk of disruption reaching euro-area institutions. Reuters reported that the ECB already has swap arrangements with the Federal Reserve and the central banks of Britain, Canada, Japan and Switzerland. The proposed work would examine how those safety nets could better support a sovereign euro area and a strong euro.
LIQUIDITY BACKSTOPS SUPPORT INTERNATIONAL USE
Lagarde told lawmakers the ECB would be “working on swap lines that will be more responsive to the imperative of having a sovereign euro area and a strong euro”. Reuters linked the statement to the institution’s wider effort to expand the euro’s international footprint.
Reuters also reported that the ECB had received around 30 applications for a separate repo facility. That programme lets foreign central banks borrow euros against euro-denominated collateral, providing another channel for supplying liquidity beyond the currency area.
IMPLEMENTATION TERMS REMAIN UNSET
The remarks described a work plan, not a completed policy decision. Lagarde disclosed no new counterparties, facility sizes, pricing, eligibility conditions or launch date for revised swap arrangements.