In a statement, the Fed said the currency swaps were intended to make it easier for European companies, institutions and governments to borrow dollars when they need them, “and to prevent the spread of strains to other markets and financial centers.”

The statement said the action was taken “in response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe.” The statement added: “Central banks will continue to work together closely as needed to address pressures in funding markets.”

The program announced Sunday night is broadly similar to one that the Fed introduced in December 2007, as the United States entered a recession caused by the collapse of its housing market.

Under that program, the Fed provided dollars to central banks in exchange for an equivalent amount in foreign currency, based on prevailing exchange rates. The parties agreed to make the same exchange in reverese at a later date — anywhere from one day to three months later — using the same exchange rate as in the initial transaction.

The swap operations do not carry any exchange rate risks or credit risks, the Fed said. The Fed would not be a party to whatever dollar-denominated loans the European Central Bank may make to European financial institutions.

(An equivalent program was announced in April 2009 to give the Fed the ability to provide liquidity to American institutions in foreign currencies, but the Fed did not end up having to use that program.)

The Fed actually made money from the previous dollar swap program. The foreign central banks paid the Fed interest equivalent to what they made from lending the dollars. The Fed, however, did not pay any interest on the foreign currencies it took in exchange, having agreed to hold them instead of lending them out or investing them in the private markets. The new program is designed the same way.