The Committee on the Global Financial System (CGFS) has published a report entitled The functioning and resilience of cross-border funding markets.
The report examines the funding market disruptions during the financial crisis, reviews the policy responses and distills the following lessons:
- The build up of maturity mismatches by internationally active banks was a major vulnerability and should be better monitored and managed.
- The financial crisis did, however, highlight the resilience of the foreign exchange markets, which continued to function despite severe pressures.
- The immediate policy responses, including central bank swap and repo lines and the use of own foreign exchange reserves, were effective and appropriate. In other situations different policy tools might be more suitable.
View CGFS publishes report on lessons distilled from funding market disruptions, 24 March 2010