COVID Response: The Fed’s Central Bank Swap Lines and FIMA Repo Facility

23 Pages Posted: 29 Sep 2021

See all articles by Mark Choi

Mark Choi

affiliation not provided to SSRN

Linda S. Goldberg

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Robert I Lerman

affiliation not provided to SSRN

Fabiola Ravazzolo

Federal Reserve Bank of New York

Date Written: September 2021

Abstract

Building on the facility design and application experience from the period of the global financial crisis, in March 2020 the Federal Reserve eased the terms on its standing swap lines in collaboration with other central banks, reactivated temporary swap agreements, and then introduced the new Foreign and International Monetary Authorities (FIMA) repo facility. While these facilities share similarities, they are different in their operations, breadth of counterparties and potential span of effects. This article provides key details on these facilities and evidence that the central bank swap lines and FIMA repo facility can reduce strains in global dollar funding markets and U.S. Treasury markets during extreme stress events.

Keywords: swap line, dollar, liquidity, repo, Federal Reserve lending facilities

JEL Classification: F33, F34, G28

Suggested Citation

Choi, Mark and Goldberg, Linda S. and Lerman, Robert I and Ravazzolo, Fabiola, COVID Response: The Fed’s Central Bank Swap Lines and FIMA Repo Facility (September 2021). FRB of New York Staff Report No. 983, Available at SSRN: https://ssrn.com/abstract=3931682 or http://dx.doi.org/10.2139/ssrn.3931682

Mark Choi

affiliation not provided to SSRN

Linda S. Goldberg (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2836 (Phone)
212-720-6831 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert I Lerman

affiliation not provided to SSRN

Fabiola Ravazzolo

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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