How Fed Swap Lines Supported the U.S. Corporate Credit Market amid COVID-19 Strains

Nicola Cetorelli, Linda Goldberg and Fabiola Ravazzolo

No 20200612, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The onset of the COVID-19 shock in March 2020 brought large changes to the balance sheets of the U.S. branches of foreign banking organizations (FBOs). Most of these branches saw sizable usage of committed credit lines by U.S.-based clients, resulting in increased funding needs. In this post, we show that branches of FBOs from countries whose central banks used standing swap lines with the Federal Reserve (“standing swap central banks”—SSCBs) met their increased funding needs by accessing dollars that flowed into the United States through their foreign parent banks. This volume of dollar inflows accounted for at least half of the late March aggregate take-up at SSCB dollar operations.

Keywords: dollar; swap line; central banks; foreign banking organizations; COVID-19 (search for similar items in EconPapers)
JEL-codes: G2 (search for similar items in EconPapers)
Date: 2020-06-12
New Economics Papers: this item is included in nep-cba
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2020 ... ovid-19-strains.html Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:88138

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().