The coordinated action to increase dollar liquidity by the world’s leading central banks will do no harm. That is already more than many economic policymakers can boast of. The expansion of currency swap lines could even do some good if it succeeds in turning around the psychology of markets – and of eurozone governments.

The worlds’ most acute financial problem today is in the eurozone banking system, and the most acute problem for European banks is access to dollar funding. Eurozone fumbling in the debt crisis has led overseas money market funds and other investors to pull in their horns, squeezing the dollar-denominated parts of eurozone balance sheets. If this sparked a fire sale of dollar assets, contagion could spread to US banks.

Wednesday’s policy action should ease the squeeze – witness the leap in shares of French banks which are particularly vulnerable to dollar shortages. It extends and lowers the price of the European Central Bank’s access to dollars from the Federal Reserve (and that of central banks in Japan, the UK, Canada and Switzerland) which the ECB can pass on to its counterparty banks. The participating central banks also set up swap lines in their respective currencies, which may be a wise precautionary move (they are not currently needed) but certainly serves a face-saving function for the eurozone.