Bank of France Governor Christian Noyer said he’s seeking agreement among euro-area central banks for ways of providing liquidity support in Chinese yuan as countries compete for future business.
“The essential thing is liquidity backstops, either public or private ones,” Noyer said yesterday in a Bloomberg News interview in Paris. “On the public facility, we’re looking at it. We’re talking about how we can have a public backstop with a swap accord in the euro system.”
Paris is competing with London and Zurich to become the center for yuan trading in Europe as China makes its currency more widely used around the world. A swap arrangement would allow central banks to supply yuan to commercial banks whose customers may need that currency. The Bank of England said in February that it planned to sign a deal soon on a three-year currency swap arrangement.
A system of private liquidity arrangement is already being put together, Noyer said.
“We’ve been working with the Hong Kong authorities, the Chinese banks,” Noyer said. “The system is now being put in place. The Chinese banks are very interested and the big international banks too.”