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Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?

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Abstract

In March 2020, the Federal Open Market Committee (FOMC) made changes to its swap line facilities with foreign central banks to enhance the provision of dollars to global funding markets. Because the dollar has important roles in international trade and financial markets, reducing these strains helps facilitate the supply of credit to households and businesses, both domestically and abroad. This post summarizes the changes made to central bank swap lines and shows when these changes were effective at bringing down dollar funding strains abroad.

Suggested Citation

  • Nicola Cetorelli & Linda S. Goldberg & Fabiola Ravazzolo, 2020. "Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?," Liberty Street Economics 20200522, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:88046
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    Cited by:

    1. Georgiadis, Georgios & Müller, Gernot J. & Schumann, Ben, 2021. "Global risk and the dollar," Working Paper Series 2628, European Central Bank.
    2. 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.
    3. Lodge, David & Pérez, Javier J. & Albrizio, Silvia & Everett, Mary & De Bandt, Olivier & Georgiadis, Georgios & Ca' Zorzi, Michele & Lastauskas, Povilas & Carluccio, Juan & Parrága, Susana & Carvalho,, 2021. "The implications of globalisation for the ECB monetary policy strategy," Occasional Paper Series 263, European Central Bank.
    4. Mark Choi & Linda S. Goldberg & Robert Lerman & Francesco Ravazzolo, 2022. "The Fed’s Central Bank Swap Lines and FIMA Repo Facility," Economic Policy Review, Federal Reserve Bank of New York, vol. 28(1), July.
    5. Iñaki Aldasoro & Egemen Eren & Wenqian Huang, 2021. "Dollar funding of non-US banks through Covid-19," BIS Quarterly Review, Bank for International Settlements, March.
    6. repec:fip:a00001:94154 is not listed on IDEAS
    7. Iñaki Aldasoro & Torsten Ehlers & Patrick McGuire & Goetz von Peter, 2020. "Global banks' dollar funding needs and central bank swap lines," BIS Bulletins 27, Bank for International Settlements.

    More about this item

    Keywords

    dollar; swap; central banks; COVID-19;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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