Post-GFC market segmentation ‘caused dollar costs to rise abroad’

Dallas Fed research sees new role for US in providing central bank swap lines


Market segmentation following the global financial crisis has raised the price of borrowing US dollars abroad, according to new research from the Federal Reserve Bank of Dallas. 

The paper was written by Philippe Bacchetta, J Scott Davis and Eric van Wincoop, and published on January 9. The authors say segmentation and regulatory constraints on non-US investors’ access to dollars have “opened a new role for the Fed to provide dollar liquidity to the rest of the world through central bank dollar

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