$50B swap line increase likely tied to Japan, Lawrence Lepard notes - Traders Union
$50B swap line increase likely tied to Japan, Lawrence Lepard notes - Traders Union
Source: Traders Union
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DW NOTE
The Fed doesn't expand swap lines by $50 billion because Japan asked nicely. It does so because Japanese banks need immediate dollar liquidity and the alternative is a funding crisis that crosses the Pacific in hours. If Lepard is correct and Tokyo is the counterparty, the question is what broke in Japan's dollar funding markets that required emergency Fed intervention this week.