Current Issues in Economics and Finance
The Federal Reserve’s Foreign Exchange Swap Lines
April 2010 Volume 16, Number 4
JEL classification: E52, F33, G15

Authors: Michael J. Fleming and Nicholas J. Klagge

The financial crisis that began in August 2007 disrupted U.S. dollar funding markets not only in the United States but also overseas. To address funding pressures internationally, the Federal Reserve introduced a system of reciprocal currency arrangements, or “swap lines,” with other central banks. The swap line program, which ended early this year, enhanced the ability of these central banks to provide U.S. dollar funding to financial institutions in their jurisdictions.

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