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
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
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