However, in late November, the Federal Reserve agreed with the ECB and the central banks of Canada, Japan, Switzerland, and the United Kingdom to extend the swap lines through February 2013 and to reduce their pricing, from a spread of 100 basis points over the overnight index swap rate to 50 basis points.1 The lower cost to the ECB and other foreign central banks enabled them, in turn, to reduce the cost of the short-term dollar loans they provide to financial institutions in their jurisdictions.
As a result, usage of the swap line increased considerably, peaking at $ in mid-February.