Silvia Albrizio, Ivan Kataryniuk, Luis Molina Sánchez, Jan Schaefer, 29 September 2021

Swap and repo lines have become an integral part of the ECB’s toolkit. During the Global Crisis and the Covid-19 pandemic, the ECB announced more than 28 agreements to provide euro liquidity to foreign exchange markets, mainly within Europe. This column shows that the mere announcement instilled confidence in foreign exchange markets, reducing the premium paid by recipient country agents to borrow euros. Moreover, these lines not only prevent negative spillbacks to the euro area, but also push domestic bank equity prices in euro area countries highly exposed via banking linkages to targeted countries.

Raphael Auer, Sébastien Kraenzlin, 14 October 2009

The world’s major central banks used underpublicised swap agreement to address mismatches in their currency-specific liquidity needs during the crisis. This column says these measures where highly effective and came at a very low cost.

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