Monday, May 10, 2010

The Federal Reserve Describes Currency Swaps

Now that the Federal Reserve has decided to take part in the PIIGS bailout via currency swaps, it will be valuable to understand just how currency swaps work.

The Fed also used currency swaps in the first part of the current crisis and the Federal Reserve economists Michael J. Fleming and Nicholas J. Klagge have written a primer on the swaps and how they functioned.

That primer is now in the EPJ Vault, here.

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