BRIEF-Transportation Safety Board Of Canada says broken wheel led to Jan 2016 derailment of Canadian National Railway freight train
* Broken wheel led to Jan 2016 derailment of Canadian National Railway Company freight train near Webster, Ontario
FRANKFURT Dec 17 Currency swap lines linking world central banks help make global banks more resilient in times of financial stress and protect American households and firms from the knock-on effects of such episodes, a top Federal Reserve official said on Monday.
Top central banks around the world last week renewed a series of currency swap lines set up during the 2007-2009 financial crisis, providing a precaution against future market strains.
"The Federal Reserve's temporary dollar liquidity swap lines with the European Central Bank and other central banks are an effective response to stresses in dollar funding markets," Fed Board Governor Jeremy Stein said in remarks prepared for delivery to the Global Research Forum, International Macroeconomics and Finance, at the European Central Bank. "These lines have helped avert fire sales of dollar assets and maintain the flow of credit to U.S. households and firms."
The Fed last week said it had extended for another year the dollar swaps with the European Central Bank, Bank of Canada, Bank of England and Swiss National Bank.
Stein, who did not comment on the U.S. economic outlook or monetary policy in his prepared remarks, said proposed rules to boost liquidity at foreign banks should also help make non-U.S. banks more resilient.
"These rules should reduce the pressure on foreign banks that rely heavily on short-term dollar funding to either sell illiquid dollar assets or cut back on dollar lending in times of financial stress," he said. "By helping to alleviate disruptions in dollar funding markets the rules should also reduce the reliance on swap lines in a future stress episode."
Swap lines were an important part of the powerful response launched by monetary authorities during the crisis to keep global financial markets open, curbing lofty dollar funding costs which had spiraled due to fear over counter-party risk.
Swap arrangements were revised and extended in November, 2011 as the euro zone debt crisis intensified, to ease the dollar funding pressure being experienced by some European banks.
* Fitch affirms California GO VRDBs series 2005B-5 at 'AA-'/'F1' Source text for Eikon: