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Author: Linda S. Goldberg
Publisher: DIANE Publishing
ISBN: 143793093X
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
Following a scarcity of dollar funding available internationally to banks and financial institutions, in Dec. 2007 the Federal Reserve began to establish or expand Temporary Reciprocal Currency Arrangements with 14 foreign central banks. These central banks had the capacity to use these swap facilities to provide dollar liquidity to institutions in their jurisdictions. This paper presents the developments in the dollar swap facilities through the end of 2009. The facilities were a response to dollar funding shortages outside the U.S. during a period of market dysfunction. The dollar swap lines among central banks were effective at reducing the dollar funding pressures abroad and stresses in money markets. Charts and tables.
Author: Linda S. Goldberg
Publisher: DIANE Publishing
ISBN: 143793093X
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
Following a scarcity of dollar funding available internationally to banks and financial institutions, in Dec. 2007 the Federal Reserve began to establish or expand Temporary Reciprocal Currency Arrangements with 14 foreign central banks. These central banks had the capacity to use these swap facilities to provide dollar liquidity to institutions in their jurisdictions. This paper presents the developments in the dollar swap facilities through the end of 2009. The facilities were a response to dollar funding shortages outside the U.S. during a period of market dysfunction. The dollar swap lines among central banks were effective at reducing the dollar funding pressures abroad and stresses in money markets. Charts and tables.
Author: Linda S. Goldberg
Publisher:
ISBN:
Category :
Languages : en
Pages : 1
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Book Description
Following a scarcity of dollar funding available internationally to banks and financial institutions, through 2008 the Federal Reserve expanded or established Temporary Reciprocal Currency Arrangements (Swap Lines) with fourteen foreign central banks. These central banks would have the capacity to use funds accessed through the swaps to provide dollar liquidity to institutions in their constituencies. In this paper, we focus on the elements of the dollar funding shortages that arose in 2007 and continued into 2009. In particular, we detail the market forces that contributed to the changing availability of dollars, with some focus on disruptions associated with money market funds and interbank lending activity. We also detail the forces behind the demand for dollars by globally-oriented banks. The paper then turns to the contribution of foreign exchange swap lines among central banks to reducing dollar funding pressures and limiting stresses in money markets, using for this purpose an analysis of high frequency data on funding costs in different currencies and tenors.
Author: Linda S. Goldberg
Publisher:
ISBN:
Category : Currency swaps
Languages : en
Pages : 34
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Book Description
Following a scarcity of dollar funding available internationally to banks and financial institutions, starting in December 2007 the Federal Reserve established or expanded Temporary Reciprocal Currency Arrangements with fourteen foreign central banks. These central banks had the capacity to use these swap facilities to provide dollar liquidity to institutions in their jurisdictions. This paper presents the developments in the dollar swap facilities through the end of 2009. The facilities were a response to dollar funding shortages outside the United States during a period of market dysfunction. Formal research, as well as more descriptive accounts, suggests that the dollar swap lines among central banks were effective at reducing the dollar funding pressures abroad and stresses in money markets. The central bank dollar swap facilities are an important part of a toolbox for dealing with systemic liquidity disruptions -- National Bureau of Economic Research web site.
Author: Mr.Eugenio M Cerutti
Publisher: International Monetary Fund
ISBN: 1484395212
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
For about three decades until the Global Financial Crisis (GFC), Covered Interest Parity (CIP) appeared to hold quite closely—even as a broad macroeconomic relationship applying to daily or weekly data. Not only have CIP deviations significantly increased since the GFC, but potential macrofinancial drivers of the variation in CIP deviations have also become significant. The variation in CIP deviations seems to be associated with multiple factors, not only regulatory changes. Most of these do not display a uniform importance across currency pairs and time, and some are associated with possible temporary considerations (such as asynchronous monetary policy cycles).
Author: Michael Perks
Publisher: International Monetary Fund
ISBN: 1513590138
Category : Business & Economics
Languages : en
Pages : 40
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Book Description
This paper makes contributions to the study of bilateral swap lines (BSLs). First, this paper fills a BSL information gap by constructing a comprehensive database of BSLs based on publicly available information, including after the onset of the COVID-19 pandemic. Second, the paper provides the results of regression analysis exploring several empirical questions that were not covered in previous studies. The paper documents the evolution of BSLs into an important part of the Global Financial Safety Net (GFSN), with some helping to stabilize financial market during both the Global Financial Crisis (GFC) and the COVID-19 pandemic. Analysis suggests that countries on the recipient side of BSLs are more likely to sign and renew BSLs designed to alleviate balance of payments needs as their external position weakens. U.S. Federal Reserve BSLs appear to have been effective at stabilizing financial market conditions during the COVID-19 pandemic.
Author: Michael D. Bordo
Publisher: University of Chicago Press
ISBN: 022605151X
Category : Business & Economics
Languages : en
Pages : 453
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Book Description
During the twentieth century, foreign-exchange intervention was sometimes used in an attempt to solve the fundamental trilemma of international finance, which holds that countries cannot simultaneously pursue independent monetary policies, stabilize their exchange rates, and benefit from free cross-border financial flows. Drawing on a trove of previously confidential data, Strained Relations reveals the evolution of US policy regarding currency market intervention, and its interaction with monetary policy. The authors consider how foreign-exchange intervention was affected by changing economic and institutional circumstances—most notably the abandonment of the international gold standard—and how political and bureaucratic factors affected this aspect of public policy.
Author: Julian Alworth
Publisher:
ISBN:
Category : Commercial paper issues
Languages : en
Pages : 122
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Book Description
Author: International Monetary Fund. Statistics Dept.
Publisher: International Monetary Fund
ISBN: 1484350162
Category : Business & Economics
Languages : en
Pages : 258
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Book Description
This update of the guidelines published in 2001 sets forth the underlying framework for the Reserves Data Template and provides operational advice for its use. The updated version also includes three new appendices aimed at assisting member countries in reporting the required data.
Author: Ms.Catharina J. Hooyman
Publisher: International Monetary Fund
ISBN: 145184848X
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
The paper discussed the use of foreign exchange swaps by central banks. Such use has aimed at affecting domestic liquidity, managing foreign exchange reserves, and stimulating domestic financial markets. It discusses these different uses and present evidence for a selected group of countries. The paper cautions about the use of foreign exchange swaps to defend a particular exchange rate at a time when foreign exchange reserves are under pressure. It notes, finally, that use of foreign exchange swaps by central banks has been losing importance.
Author: Ms.Li L. Ong
Publisher: International Monetary Fund
ISBN: 145196353X
Category : Business & Economics
Languages : en
Pages : 47
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Book Description
The proliferation of foreign exchange (FX) swaps as a source of funding and as a hedging tool has focused attention on the role of the FX swap market in the recent crisis. The turbulence in international money markets spilled over into the FX swap market in the second-half of 2007 and into 2008, giving rise to concerns over the ability of banks to roll over their funding requirements and manage their liquidity risk. The turmoil also raised questions about banks' ability to continue their supply of credit to the local economy, as well as the external financing gap it could create. In this paper, we examine the channels through which FX swap transactions could affect a country's financial and economic stability, and highlight the strategies central banks can employ to mitigate market pressures. While not offering any judgment on the instrument itself, we show that the use of FX swaps for funding and hedging purposes is not infallible, especially during periods of market stress.