The Fed’s Central Bank Swap Lines and FIMA Repo Facility

Choi, Mark; Goldberg, Linda S.; Lerman, Robert; Ravazzolo, Francesco

Journal Article

The Fed’s Central Bank Swap Lines and FIMA Repo Facility

Abstract: Building on the facility design and application experience from the global financial crisis, in March 2020 the Federal Reserve eased the terms on its standing swap lines in collaboration with other central banks, reactivated temporary swap agreements, and introduced the new Foreign and International Monetary Authorities (FIMA) Repo Facility. While these facilities have similarities, they differ in their operations, breadth of counterparties, and range of potential effects. This article provides key details on these facilities and highlights evidence that they can reduce strains in global dollar funding markets and U.S. Treasury markets during extreme stress events.

Keywords: Federal Reserve; swap line; dollar; liquidity; repo; Federal Reserve lending facilities; Central Bank Swap Lines; FIMA Repo Facility;

JEL Classification: F33; F34; G28;