Saleem Bahaj and Fernando Eguren-Martin The US dollar has a dominant role in the international financial system. The fact that trade and cross-border investment are overwhelmingly dollar-denominated means that non-US banks are heavily reliant on dollar funding (Aldasoro and Ehlers (2018)). This funding dried up during the Covid-19 epidemic, prompting the use of central bank […]
[New post] Covid-19 briefing: cross-border dollar funding
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