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

Mark Choi, Linda Goldberg, Robert Lerman and Fabiola Ravazzolo

No 983, Staff Reports from Federal Reserve Bank of New York

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 (search for similar items in EconPapers)
JEL-codes: F33 F34 G28 (search for similar items in EconPapers)
Pages: 23
Date: 2021-09-01
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac and nep-mon
Note: This paper was prepared for an upcoming issue of the Economic Policy Review and a related New York Fed conference, “Implications of Federal Reserve Actions in Response to the COVID-19 Pandemic.”
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