The social management of complex uncertainty: Central Bank similarity and crisis liquidity swaps at the Federal Reserve

Marple, Tim

doi:10.1007/s11558-020-09378-x

Cited by 4 publications

(3 citation statements)

References 94 publications

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“…During the 1960s, acting in concert with the Fed and other central banks, the BIS drew on Fed swap lines to manage liquidity in the Eurodollar markets. The BIS intermediated between central banks and Eurodollar commercial banks, making unsecured deposits with the latter to support their dollar liquidity during periods of speculative pressure on the dollar or war (McCauley and Schenk, 2020). The BIS thus acted as the first global dollar lender-of-last-resort throughout the late 1960s, albeit in close coordination with the US Federal Reserve.…”

Section: The Rise and Vulnerabilities Of Private Fx Swap Marketsmentioning

confidence: 99%

FX swaps, shadow banks and the global dollar footprint

2022

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The era of dollar-based financial globalisation has seen a steady rise in the use of foreign exchange (FX) swaps. We provide a macrofinancial political economy perspective on the geography of FX swaps, and the spatial effects of central bank policies aimed at taming instabilities associated with the uneven geography of the dollar. First, we analyse the mechanisms and potential sources of instability involved in accessing dollars using FX swaps and repurchase agreement (repo) contracts, respectively, in both private and public (central bank) use. Second, we show that the distribution of currencies and institutions involved in trading swaps is skewed, reflecting both the dominance of the dollar as international financing currency and the uneven international distribution of dollar-denominated assets and liabilities. We document the changing composition of dollar swap users on both the long-dollar and short-dollar side and identify potential sources of macrofinancial vulnerability for dollar lenders and borrowers. The Fed's approach to global liquidity provision via both swaps and repos constitutes a spatially variegated strategy to preserve the hegemony of the US dollar. Despite its partial success in reducing instability due to cross-border financial imbalances, the Fed's uneven and hierarchical lender of last resort approach cannot sufficiently stabilise global finance to underpin a new era of macrofinancial stability.

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Section: The Rise and Vulnerabilities Of Private Fx Swap Marketsmentioning

confidence: 99%

FX swaps, shadow banks and the global dollar footprint

2022

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“…A challenge to this notion might be that organizations themselves, or various 'systemic' pressures, inevitably produce the behaviour needed. Yet, several recent high quality studies suggest that the composition of leaders matter, even within organizations facing strong systemic imperatives (Marple 2020;Seabrooke and Henriksen 2017), such as in global policy contexts including how the IMF operates (Chwieroth 2013;Kentikelenis and Seabrooke 2017;Nelson 2014;Seabrooke and Nilsson 2015), military decisions and foreign policy (Barceló 2018;Horowitz and Stam 2014), nuclear proliferation (Fuhrmann and Horowitz 2014), and democratization (Gift and Krcmaric 2017).…”

Section: Why the Diversity Of Global Elite Network Mattersmentioning

confidence: 99%

How white is the global elite? An analysis of race, gender and network structure

et al. 2020

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Research on elites often utilizes network analysis to describe and analyse the interrelationships among elites and how their prominence varies by demographic characteristics. We examine the diversity of global elites through an analysis of the board members of large corporations, think tanks, international organizations, and transnational policy planning groups. Using new data, we provide the first descriptive picture of global elite networks in terms of race and gender. We also test the ‘core–periphery’ hypothesis, which predicts that as non‐whites and women achieve elite positions they will be marginalized to the periphery of elite networks, while the core remains significantly more white and male. We find consistent evidence for the core–periphery hypothesis across a range of empirical tests, from simple k‐coring to various core–periphery models. Most groups decline in their representation in the core, and this includes white women. White men are the only group that increases in representation in the core compared to the periphery.

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“…Marple (2021) argues that social similarity between central banks may be a driver of the decision to extend swap lines, which can depend on historical connections such as colonial history.©International Monetary Fund. Not for Redistribution…”

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confidence: 99%

Trust Bridges and Money Flows

Griffoli¹,

Adrian²,

Garratt³

et al. 2023

Fintech Notes

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Cross-border payments are expensive, slow, and opaque. These problems reflect multiple frictions, many of which boil down to limited trust among counterparties. Trust plays a central role in exchanging credit-based money. End users need to trust the issuers of money, and issuers must trust users to satisfy financial integrity requirements. Transactions are possible only where trust links exist. Interoperability between different forms of money can thus be conceptualized as the network of trusted links necessary for transactions. Traditionally, across borders, trust links involve exclusive bilateral credit relationships among correspondent banks. However, the fixed costs required to build these links foster an expensive and concentrated system. This paper interprets different payment arrangements in terms of the implied trust structures. It discusses how the tokenization of money alters trust links and allows for a potentially more efficient market structure to exchange money. The paper ends with a suggested global marketplace to trade tokenized money directly across borders.* We thank Carlos Chavez Padilla for outstanding research assistance, as well as seminar participants at the IMF and Bank for International Settlements (BIS) for helpful comments, especially

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The social management of complex uncertainty: Central Bank similarity and crisis liquidity swaps at the Federal Reserve

Cited by 4 publications

References 94 publications

FX swaps, shadow banks and the global dollar footprint

FX swaps, shadow banks and the global dollar footprint

How white is the global elite? An analysis of race, gender and network structure

Trust Bridges and Money Flows

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