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Global banks’ dollar funding needs and central bank swap lines

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BIS Bulletin  |  No 27  |  16 July 2020 by  Iñaki Aldasoro, Torsten Ehlers, Patrick McGuire and Goetz von Peter PDF full text (711kb)  |  9 pages Key takeaways At trillion, the gross dollar liabilities of banks headquartered outside the United States at end-2019 were nearly as high as before the Great Financial Crisis. Most of their dollar funding was booked outside the United States. We measure non-US banks' short-term dollar funding needs by comparing short-term dollar liabilities (including off-balance sheet FX swaps) with holdings

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BIS Bulletin  |  No 27  | 
16 July 2020
PDF full text
 (711kb)
 |  9 pages

Key takeaways

  • At $13 trillion, the gross dollar liabilities of banks headquartered outside the United States at end-2019 were nearly as high as before the Great Financial Crisis. Most of their dollar funding was booked outside the United States.
  • We measure non-US banks' short-term dollar funding needs by comparing short-term dollar liabilities (including off-balance sheet FX swaps) with holdings of liquid dollar assets.
  • The scale of the central bank swap lines are of similar magnitude to banks' short-term dollar funding needs. Swap line usage peaked in May at $449 billion and has subsided since. However, dollar funding needs of corporates may yet reveal a broader need for dollars outside the banking system.

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International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

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