International liquidity provision during the financial crisis: a view from Switzerland

Raphael Auer and Sébastien Kraenzlin

No 75, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: We document the provision of CHF liquidity by the Swiss National Bank (SNB) to banks domiciled outside Switzerland during the recent financial crisis. What makes the Swiss case special is the size of this liquidity provision?making up 80 percent of all short term CHF liquidity provided by the SNB?and also the measures that were adopted to distribute this liquidity. In addition to making CHF available to other central banks via SWAP facilities, the SNB also allows banks domiciled outside Switzerland to directly participate in its REPO transactions. Although this policy was adopted for reasons that predate the financial crisis, during the crisis it proved tremendously helpful as it gave the European banking system direct access to the primary funding facility for CHF.

Keywords: Demand for money; Monetary policy - Switzerland; International finance (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ban, nep-eec, nep-mac and nep-mon
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:75

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