FX swaps and forwards: missing global debt?

Claudio Borio, Robert McCauley and Patrick McGuire

BIS Quarterly Review, 2017

Abstract: What would balance sheets look like if the borrowing through FX swaps and forwards were recorded on-balance sheet, as the functionally equivalent repo debt is? We combine various data sources to estimate the size, distribution and use of this “missing” debt and to begin to assess its implications for financial stability. A key finding is that non-banks outside the United States owe large sums of dollars off-balance sheet through these instruments. The total is of a size similar to, and probably exceeding, the $10.7 trillion of on-balance sheet dollar debt. Even when this debt is used to hedge FX risk, it can still involve significant maturity mismatches.

JEL-codes: F31 F34 F41 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (54)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:bisqtr:1709e

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