A Big problem for the banks has been a shortage of dollars in the money markets, particularly in the European morning before the New York market opens. That is one reason why dollar interest rates have been so high relative to those for euros.rnNormally, investors and banks would arrange foreign-exchange swaps among themselves, agreeing to switch euros into dollars for a set period. But banks are nervous about the risk that their counterparty will go bust while the swap is being put in place and so are shying away from such agreements.
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