Central Bank Swap Lines and Cross-Border Bank Flows

BIS Bulletin No 34

9 Pages Posted: 12 Feb 2021

See all articles by Iñaki Aldasoro

Iñaki Aldasoro

Bank for International Settlements (BIS)

Christian Cabanilla

Bank for International Settlements (BIS)

Piti Disyatat

Bank for International Settlements (BIS)

Torsten Ehlers

International Monetary Fund (IMF) - Monetary and Capital Markets Department; Bank for International Settlements (BIS)

Patrick McGuire

Bank for International Settlements (BIS)

Goetz von Peter

Bank for International Settlements - Research and Policy Analysis

Date Written: December 14, 2020

Abstract

Central banks drew heavily on US dollar swap lines with the Federal Reserve in the first half of 2020, contributing to a surge in cross-border banking flows during this period.
The large increase in cross-border claims on banks operating in the United States – in the form of cross-border interbank and intragroup positions – reflected an increase in dollar liquidity demand from non-US banks partly met through use of the swap lines.
In a global financial system heavily reliant on the use of the dollar, the network of central bank swap lines centred on the Fed serves as a critical elastic backstop for the private provision of dollar liquidity.

Keywords: dollar funding, dollar liqudiity, central bank swap lines, cross border capital flows

Suggested Citation

Aldasoro, Iñaki and Cabanilla, Christian and Disyatat, Piti and Ehlers, Torsten and McGuire, Patrick M. and von Peter, Goetz, Central Bank Swap Lines and Cross-Border Bank Flows (December 14, 2020). BIS Bulletin No 34, Available at SSRN: https://ssrn.com/abstract=3748491

Iñaki Aldasoro

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Christian Cabanilla

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Piti Disyatat

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Torsten Ehlers

International Monetary Fund (IMF) - Monetary and Capital Markets Department ( email )

United States

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Patrick M. McGuire (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Goetz Von Peter

Bank for International Settlements - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
+ 41 61 280 8840 (Phone)

HOME PAGE: http://www.bis.org/author/goetz_von_peter.htm

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
48
Abstract Views
173
PlumX Metrics