Key takeaways

• Central banks drew heavily on US dollar swap lines with the Federal Reserve in the first half of 2020, contributing to a surge in cross-border banking flows during this period.
• The large increase in cross-border claims on banks operating in the United States – in the form of cross-border interbank and intragroup positions – reflected an increase in dollar liquidity demand from non-US banks partly met through use of the swap lines.
• In a global financial system heavily reliant on the use of the dollar, the network of central bank swap lines centred on the Fed serves as a critical elastic backstop for the private provision of dollar liquidity.