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The Global Dash for Cash in March 2020

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Abstract

The economic disruptions associated with the COVID-19 pandemic sparked a global dash-for-cash as investors sold securities rapidly. This selling pressure occurred across advanced sovereign bond markets and caused a deterioration in market functioning, leading to a number of central bank actions. In this post, we highlight results from a recent paper in which we show that these disruptions occurred disproportionately in the U.S. Treasury market and offer explanations for why investors’ selling pressures were more pronounced and broad-based in this market than in other sovereign bond markets.

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  • Jordan Barone & Alain P. Chaboud & Adam Copeland & Cullen Kavoussi & Frank M. Keane & Seth Searls, 2022. "The Global Dash for Cash in March 2020," Liberty Street Economics 20220712, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:94466
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    File URL: https://libertystreeteconomics.newyorkfed.org/2022/07/the-global-dash-for-cash-in-march-2020/
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    More about this item

    Keywords

    sovereign bond markets; financial crisis; COVID-19;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • I1 - Health, Education, and Welfare - - Health
    • G01 - Financial Economics - - General - - - Financial Crises

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