Working Paper: CEPR ID: DP17122
Authors: Saleem Bahaj; Ricardo Reis
Abstract: Liquidity lines between central banks are a key part of the international financial safety net. In this review article, we lay out some of the economic questions that they pose. For some of them, research has provided some answers. For others, there is still much to discover,
Keywords: swap lines; FIMA; EUREP; financial stability; international currency; lender of last resort
JEL Codes: E44; F33; G15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| liquidity lines between central banks (F33) | alleviate funding pressures in times of crisis (H12) |
| alleviate funding pressures in times of crisis (H12) | stabilize financial markets (E44) |
| liquidity lines between central banks (F33) | CIP deviations (L15) |
| liquidity lines (G33) | borrowing costs for banks (G21) |
| announcement of liquidity lines (G33) | market perceptions (G14) |
| announcement of liquidity lines (G33) | funding costs (G32) |
| access to liquidity lines (G33) | lending practices (G21) |
| access to liquidity lines (G33) | risk profiles (G22) |
| access to liquidity lines (G33) | overall financial stability (F65) |