Economists call for action on risk of dollar liquidity crunch

Credit to non-banks and currency mismatches have grown while oversight is “fragmented”, report warns

Liquidity trendline
Mismatch: investors buy illiquid and high-yielding assets, whose prices are quoted daily, creating a “liquidity illusion”

Policy-makers need to take action to improve the resilience of the global financial system as the risk of a “dollar liquidity crunch” is growing, a new report warns.

André Icard and Philip Turner say a confluence of factors is creating global risks that may be difficult to tackle. Dollar resources to backstop the system from central bank reserves, the International Monetary Fund (IMF) or Federal Reserve swap lines are either limited or, in the latter case, contingent on political will.

The two

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a FX Markets account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: