ECB officials question Fed dollar backstops under Trump

Some European central banking and supervisory officials are informally debating whether they can still rely on the US Federal Reserve for dollar liquidity in times of financial stress, six sources told Reuters.

While officials see it as highly unlikely that the Fed would withdraw its dollar funding backstops, discussions have emerged amid concerns over US policy shifts under President Donald Trump.

Some worry Washington could pressure the Fed to limit support, particularly given past actions on trade and security.

Despite exploring alternatives, officials acknowledge there is no viable substitute for the Fed’s role in global financial stability, the sources said. Neither the Fed nor the European Central Bank (ECB) commented on the matter.

Attribution: Reuters