Reading Perry Mehrling: Where’s My Swap Line? [Ep. 151, Macropiece Theater]

Eurodollar University · Nov 8, 2021 · 40m

The past two decades have seen the construction of a tiered system of international liquidity provision, the first tier including those whose credit is sufficient for a swap line, the second tier including those who can offer acceptable collateral, and the third tier including everyone else. It is a global dollar system, with the Fed operating de facto as the global central bank providing international lender of last resort support to the system. It is a system created not so much by conscious design, but rather as a pragmatic response to crisis, bit by bit over time. A reading, by Emil…