The members of the European Monetary Union have agreed to a bilateral loan program that will provide euro150 billion to the International Monetary Fund in an effort to halt the sovereign debt crisis in Europe. Some members of the EU will also contribute to the fund, the UK had said earlier that it would not, and the country is not among those named in the statement.The announcement also invited the participation of other members of the G20 nations to boost the IMF’s resources in the battle against the continent’s debt crisis.
There was no indication that the US Federal Reserve Bank would do more than offer to extend liquidity swaps to the Eurozone’s central banks. The currency swaps allow foreign central banks to borrow dollars and then allow local commercial banks to purchase dollars at auction while giving the Fed foreign currency (euros in this case) as collateral.
