Coordination of monetary policy

The ECB has coordinated with the Fed, Bank of England, SNB, and Bank of Japan to provide three month dollar loans to European banks so that they will have enough cash for the end of the year. This will reduce some of the sovereign risk contagion from the Greek crisis. France and German also confirmed their support of Greece's participation in the EMU.

The European banks were on the brink of a funding problems given the downgrades of French institutions earlier in the week and the fears of capital shortfalls for these institutions. The central banks are acting like lenders of last resort to European institutions. The LOIS spreads tightened almost immediately, but are still at extreme levels. The reduction in risk reduced EUR pressure and the currency improved for the day.