Abstract
Keywords: Central bank cooperation; Policy coordination; Swap; Rules The Covid 19 pandemic spawned a global liquidity crisis in March 2020. The global liquidity crisis was alleviated by the Federal Reserve and other advanced country central banks cooperating by extending the swap lines they developed in the Global Financial Crisis 2007--2008. Central bank cooperation in 2020 evolved from a two-century history across several monetary regimes that is surveyed in this paper. I find that in monetary regimes which are rules-based cooperation was most successful. International currency swaps developed to manage exchange rates during the Bretton Woods era have evolved into the leading tool to manage international liquidity crises. The swap network can be viewed as a step in the direction of a global financial safety net. Author Affiliation: (1) University of Chicago, 60637, 1972, Chicago, IL, USA (2) Rutgers University, New Brunswick, NJ, USA (3) National Bureau of Economic Research,Distinguished Visiting Fellow, Hoover Institution, Stanford University, 94305, Stanford, CA, USA (a) bordo@econ.rutgers.edu Article History: Registration Date: 12/02/2020 Accepted Date: 12/02/2020 Online Date: 01/29/2021 Byline: