NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Evolution of the Federal Reserve Swap Lines since 1962

Michael D. Bordo, Owen F. Humpage, Anna J. Schwartz

NBER Working Paper No. 20755
Issued in December 2014
NBER Program(s):Development of the American Economy, Monetary Economics

In this paper, we describe the evolution of the Federal Reserve’s swap lines from their inception in 1962 as a mechanism to forestall claims on U.S gold reserves under Bretton Woods to a means of extending emergency dollar liquidity during the Great Recession. We describe a number of consequences associated with swap operations. We argue, for example, that swaps calm crisis situations by both supplementing foreign countries’ dollar reserves and by signaling central-bank cooperation. We show how swaps exposed the Federal Reserve to conditionality and raised fears that they bypassed the Congressional appropriations process.

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Document Object Identifier (DOI): 10.3386/w20755

Published: Michael D Bordo & Owen F Humpage & Anna J Schwartz, 2015. "The Evolution of the Federal Reserve Swap Lines since 1962," IMF Economic Review, Palgrave Macmillan, vol. 63(2), pages 353-372, September. citation courtesy of

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