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COVID Response: The Fed’s Central Bank Swap Lines and FIMA Repo Facility

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Building on the facility design and application experience from the period of the global financial crisis, in March 2020 the Federal Reserve eased the terms on its standing swap lines in collaboration with other central banks, reactivated temporary swap agreements, and then introduced the new Foreign and International Monetary Authorities (FIMA) repo facility. While these facilities share similarities, they are different in their operations, breadth of counterparties and potential span of effects. This article provides key details on these facilities and evidence that the central bank swap lines and FIMA repo facility can reduce strains in global dollar funding markets and U.S. Treasury markets during extreme stress events.

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  • Mark Choi & Linda S. Goldberg & Robert Lerman & Fabiola Ravazzolo, 2021. "COVID Response: The Fed’s Central Bank Swap Lines and FIMA Repo Facility," Staff Reports 983, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:93080
    Note: This paper was prepared for an upcoming issue of the Economic Policy Review and a related New York Fed conference, “Implications of Federal Reserve Actions in Response to the COVID-19 Pandemic.”
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    More about this item

    Keywords

    swap line; dollar; liquidity; repo; Federal Reserve lending facilities;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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