The Federal Reserve’s Foreign Exchange Swap Lines
Federal Reserve Bank of New York

Michael Fleming and Nicholas Klagge provide an overview of the U.S. dollar swap line program—a system of reciprocal currency arrangements with foreign central banks—introduced by the Federal Reserve in late 2007 to address global disruptions in dollar funding markets. The swap lines increased the ability of foreign central banks to provide U.S. dollar funding to financial institutions in their jurisdictions at a time when interbank lending was effectively frozen.