Selective swap arrangements and the global financial crisis: Analysis and interpretation

Joshua Aizenman, Gurnain Kaur Pasricha

Research output: Contribution to journalArticlepeer-review

61 Scopus citations


This paper explores the logic inducing the FED to extend unprecedented swap-lines to four emerging markets in September 2008. Exposure of US banks to EMs turned out to be the most important selection criterion for explaining the "selected four" swap-lines. This result is consistent with the outlined model. The FED swap-lines had relatively large short-run impact on the exchange rates of the selected EMs, but much smaller effect on the spreads. Yet, all the swap countries saw their exchange rate subsequently depreciate to a level lower than pre-swap rate, calling into question the long-run impact of the swap arrangements.

Original languageEnglish
Pages (from-to)353-365
Number of pages13
JournalInternational Review of Economics and Finance
Issue number3
StatePublished - 1 Jun 2010
Externally publishedYes


  • Deleveraging
  • Swap-lines
  • Trade and financial exposure

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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