The Fed’s Swap Lines: Narrow Circle, Broad Effect?

Joshua Aizenman

doi:10.1007/978-3-031-26482-5_15

The Fed’s Swap Lines: Narrow Circle, Broad Effect?

Joshua Aizenman

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

Abstract

Concerns about the GFC provoking global depression induced the FED to extend unprecedented selective bilateral swap lines. The selectivity of these swap lines indicates that countries with significant trade, financial and geopolitical linkages can expect access to ad-hoc swap arrangements on a case-by-case basis. During the COVID-19 crisis, the Fed provided US dollar liquidity to the global economy by reactivating or enhancing swap arrangements with other central banks, and dabbling it down by allowing central banks to temporarily exchange their US Treasury securities held with the FED for US dollars. The impact of major central bank auctions benefitted even the more vulnerable economies, confirm the “Narrow circle, broad effect” of US FED swap lines during the GFC and the COVID-19 crisis.

Original language	English
Title of host publication	Fault Lines after COVID-19
Subtitle of host publication	Global Economic Challenges and Opportunities
Publisher	Springer Nature
Pages	249-260
Number of pages	12
ISBN (Electronic)	9783031264825
ISBN (Print)	9783031264825
DOIs	https://doi.org/10.1007/978-3-031-26482-5_15
State	Published - 1 Jan 2023
Externally published	Yes

ASJC Scopus subject areas

General Economics, Econometrics and Finance
General Business, Management and Accounting
General Social Sciences

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10.1007/978-3-031-26482-5_15

Cite this

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abstract = "Concerns about the GFC provoking global depression induced the FED to extend unprecedented selective bilateral swap lines. The selectivity of these swap lines indicates that countries with significant trade, financial and geopolitical linkages can expect access to ad-hoc swap arrangements on a case-by-case basis. During the COVID-19 crisis, the Fed provided US dollar liquidity to the global economy by reactivating or enhancing swap arrangements with other central banks, and dabbling it down by allowing central banks to temporarily exchange their US Treasury securities held with the FED for US dollars. The impact of major central bank auctions benefitted even the more vulnerable economies, confirm the “Narrow circle, broad effect” of US FED swap lines during the GFC and the COVID-19 crisis.",

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The Fed’s Swap Lines: Narrow Circle, Broad Effect?

Abstract

ASJC Scopus subject areas

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