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

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.

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