Federal Reserve sets up dollar swap lines with nine central banks for six months

The Federal Reserve is taking more action to fight the global financial crisis.

The U.S. central bank announced on Thursday morning that it had erected a temporary U.S. dollar swap lines with nine other central banks to diminish the liquidity strains in global greenback funding markets.

The Eccles Building already possesses swap lines with the European Central Bank and other major countries.

For the next six months, the new facilities will support $60 billion swap lines with Australia, Brazil, Mexico, Singapore, South Korea, and Sweden. The Fed will also have lines of $30 billion for Denmark, New Zealand, and Norway.

Perhaps it is a case of recency bias, but is the Fed doing more now than it did in 2008? Maybe all what is missing is a bailout of foreign banks.

At the start of the trading session, equities were in the red but they were a lot calmer. The Dow Jones fell 72 points, the S&P 500 shed nearly three percent, and the Nasdaq dropped 1.45 percent.

The U.S. Dollar Index, which measures the buck against a basket of currencies, has been the lone bright spot in global financial markets as it has topped 1.01.