Amid renewed fears that the euro-zone crisis could put fresh pressure on short-term funding, an unidentified bank made use of the Federal Reserve's swap facility via the Swiss National Bank, borrowing $200 million earlier this month.
The SNB disclosed that it applied for $200 million of dollar swaps on Aug. 10, at a rate of 1.08%. The funds were paid back on Aug. 18. The news was previously reported by Dow Jones Newswires.
In a sign of the nervousness sweeping the markets, both UBS AG and Credit Suisse Group, Switzerland's two largest banks, issued denials Friday that they had tapped the facility. Each emphasized that their funding and liquidity positions are strong.
A spokesman at the SNB had no further comment. The bank publishes results of its dollar auctions, but doesn't disclose the participants.
The Fed originally set up the dollar-swap facility between December 2007 and February 2010 to relieve short-term pressure on the interbank money market in Europe. The facility provides funding for the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan and the SNB.
The Fed reopened the facility in May 2010 after European funding markets came under renewed strain in the wake of the euro zone's sovereign debt crisis.
This was the first time the SNB tapped the facility since the Fed reopened it last year.
According to a report from UBS, use of the Fed's swap lines is so far a fraction of the $600 billion level at the peak of the crisis in December 2008.
