## Evolution of Bilateral Swap Lines

_IMF Working Papers, August 6, 2021_

## Source details

**Canonical URL:** [Evolution of Bilateral Swap Lines](https://www.imf.org/en/publications/wp/issues/2021/08/06/evolution-of-bilateral-swap-lines-463358)

## Other formats

- [Markdown version](/en/publications/wp/issues/2021/08/06/evolution-of-bilateral-swap-lines-463358/index.md)
- [Structured JSON version](/en/publications/wp/issues/2021/08/06/evolution-of-bilateral-swap-lines-463358/index.json)
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## Bibliographic details
- Authors: Michael Perks, Yudong Rao, Jongsoon Shin, Kiichi Tokuoka
- Published: August 6, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513590134.001

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### Main contributions and methodology
- Constructs a comprehensive database of bilateral swap lines (BSLs) based on publicly available information, including after the onset of the COVID-19 pandemic.
- Provides results of regression analysis exploring several empirical questions not covered in previous studies.

### Key findings
- Documents the evolution of BSLs into an important part of the Global Financial Safety Net (GFSN).
- Some BSLs helped to stabilize financial markets during both the Global Financial Crisis (GFC) and the COVID-19 pandemic.
- Analysis suggests that countries on the recipient side of BSLs are more likely to sign and renew BSLs designed to alleviate balance of payments needs as their external position weakens.
- U.S. Federal Reserve BSLs appear to have been effective at stabilizing financial market conditions during the COVID-19 pandemic.

### Policy-relevant implications
- BSLs can play a stabilizing role in crisis episodes and thus form an integral component of the GFSN.
- Monitoring recipient countries’ external positions can help predict demand for BSL arrangements intended to address balance of payments needs.
- The effectiveness of U.S. Federal Reserve BSLs during COVID-19 underscores the potential role of major central bank swap networks (Fed swap network, Federal Reserve BSL) in market stabilization during global stress.

### Research scope and focus areas
- Balance of payments
- COVID-19 and the COVID-19 pandemic
- Credit default swap
- Currencies
- Current account balance
- External debt
- Health
- Money

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2021/08/06/evolution-of-bilateral-swap-lines-463358_