* Fed opens forex swap lines with four central banks
* BoE, ECB, SNB, BOJ offer currencies to Fed for US banks
* Little reaction in foreign exchange market (Recasts first paragraph; adds additional comments, edits)
By Emily Kaiser
WASHINGTON, April 6 (Reuters) - Five central banks in Europe, Japan and the United States announced on Monday a way to provide foreign currency to U.S. financial institutions if needed, and they pledged to continue working together to foster financial stability.
Under the agreement, the Bank of England, the European Central Bank, the Swiss National Bank and the Bank of Japan would offer their domestic currencies to the U.S. Federal Reserve for lending to U.S. firms, should the need arise. The swap lines established total up to $295 billion.
It marked the first time that central banks had set up swap lines to ensure U.S. companies had sufficient access to British pounds, euros, Japanese yen and Swiss francs. Earlier programs were designed to get U.S. dollars to firms outside the United States as the financial crisis clogged markets.
"It is not entirely clear if today's action was prompted by a specific funding need on the part of a U.S. institution, or was merely a precautionary measure taken opportunistically while the markets are relatively calm," Goldman Sachs economist Jan Hatzius wrote in a note to clients.
However, he said since the Fed said the swap lines were being set up "should the need arise," that would imply that it hasn't. That phrase was not used when central banks established U.S. dollar swap lines last year, he noted.
Foreign exchange markets showed little reaction to the announcement.
Alan Ruskin, chief international strategist at RBS Greenwich Capital, said the swap lines were "purely a quid pro quo" following the dollar swap lines, and he did not expect them to be drawn on anytime soon.
The swap lines, which are authorized until Oct. 30, provide up to 30 billion British pounds, 80 billion euros, 10 trillion yen, and 40 billion Swiss francs to American companies, the Fed said in a statement.
"Central banks continue to work together and are taking steps as appropriate to foster stability in global financial markets," the Fed said in a statement. The four other central banks issued similar statements.
"They are trying to show there is international cooperation and this is an easy way to do it -- we know the processes, we know how it works," said Steven Ricchiuto, economist at Mizuho Securities in New York.
The Fed had previously established currency swap lines with 14 other central banks so they had U.S. dollars to lend in their markets. The first swaps were established in December 2007, and over time were extended to a wider range of foreign central banks.
"There are already steps in place for dollar funding, and this is the other side of the equation," said Geoffrey Yu, currency analyst at UBS.
"This seems to be more of a preemptive move in nature.... It's not having a tremendous impact on currency markets. The situation is such that overall there is still a dollar shortage," Yu added.
($1=100.77 Yen) (Reporting by Reuters bureaus in Washington, New York, London, Tokyo and Frankfurt, and London markets desk, Editing by Leslie Adler)