Start hereDictionarySearch
English
日本語English中文ItalianoFrançaisDeutschEspañol
Sign in Fees and how to study
NOMISMA
Read history Money history: the world and JapanBubbles, frauds and financial crisesPeople who changed moneyReadingsSee all of Read history
Understand how money works Banks and depositsInterest, prices and exchange ratesCash and digital paymentsHistory's lessons for today's decisionsSee all of Understand how money works
Look at coins Browse by photoImages, letters and materialsCare, storage and tradingSee all of Look at coins
Start hereDictionarySearch
Fees and how to study Sign in
Language
日本語English中文ItalianoFrançaisDeutschEspañol
BIBLIOGRAPHY

Central bank swaps then and now: swaps and dollar liquidity in the 1960s

BIS — Robert N McCauley, Catherine R Schenk

Claims Supported by This Source

  1. The Fed's swap lines began in 1962 and continued until 1998, spanning the transition from fixed to floating exchange rates.
  2. In the 1960s, the Fed coordinated with the BIS and European central banks to manage Eurodollar funds and interest rates via swaps. At the end of 1966, BIS and SNB deposits totaled $675 million (against a BIS-estimated market size of $13 billion).
  3. In December 2007, the Fed reauthorized swaps along with the TAF. On September 16, 2008 (the day after the Lehman collapse), Dudley reported a structural dollar funding shortage in European banks and proposed unlimited lines to the ECB, BoJ, SNB, and BoE. The balance after the cap was removed was nearly $600 billion.
  4. Operations in the 1960s were in the hundreds of millions of dollars; in 2008, nearly $600 billion. Eurodollar liabilities in 2008 were nearly $13 trillion.
  5. Conclusion: In both the 1960s and 2008, the Fed used swaps to alleviate funding shortages in the offshore dollar market. The international lender of last resort takes more forms than textbooks suggest.

How to read the verification levels. 'Read' means the material was read in its entirety. 'Bibliography and abstract confirmed' means the bibliographic information and abstract were verified. 'Via course material' means the source was referenced through the main text of a book or a country's monetary history. The text hash is the SHA-256 of the main text from the original source page, excluding tags and whitespace, used to detect if the material has been altered.