Nairobi, March 22 -- Spooked by the failure of Silicon Valley Bank (SVB) as well as the resulting contagion, major central banks in the developed economies have launched coordinated action to enhance liquidity in the banking system.

Top of the list is the establishment of US dollar liquidity swap line arrangements among the six participating central banks, namely the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the US Fed and the Swiss National Bank.

Liquidity swap lines are agreements between two central banks to exchange currencies.

As the contagion from the SVB collapse spreads into the system, the overseas operations of some of the systemically important banks are not able to meet their US doll...