European Crisis Shows Vulnerability

The Federal Reserve said that although financial conditions in the United States has grown since the crisis of 2008, events in Europe still show a vulnerable condition. Donald Kohn said in a speech in Canada that financial markets are still vulnerable due to the debt crisis of Europe. Therefore, in these conditions, the Fed take joint action with other central banks on Sunday to exchange currency. Banks that engage in "exchange" The dollar is the Bank of Canada, Bank of England, European Central Bank, Swiss National Bank and Bank of Japan. European banks need dollars to be loaned to companies in other continents. European companies hire employees, purchase of raw materials, oil and commodities by using the dollar.

Fed to lend 9.2 billion dollars to the European Central Bank to conduct such exchanges. European debt crisis first appeared in Greece later emerged fear will spread to Spain, Portugal and the euro zone countries other. This crisis has stimulated demand for U.S. dollar and weaken the value of the Euro. Narayana Kocherlakota, frontman of the Federal Reserve Bank of Minneapolis says that the decision also was required to maintain a stable dollar. They do not do this because there is a special relationship with Europe - they are American policymakers, it is intended to strengthen the American economy, he adds in a speech to business people in Wisconsin.