[3] The swap lines were briefly re-established in the wake of 9/11, but only became of global importance with the onset of the financial crisis of 2007–2008.
[5] Minutes of the 2008 US Federal Open Market Committee (FOMC) meeting at which the final decision was made show that members focused on countries with large holdings of U.S. dollar mortgage-backed securities, which might be tempted to dump them all at once if they lacked easier access to dollars, thereby forcing up mortgage rates and impeding recovery in the United States.
[5] Similarly, swap lines from the European Central Bank, Swiss, and Nordic central banks to Iceland and the Eastern European countries in 2008 were due in large part to households and businesses in these countries taking out Euro and Swiss Franc denominated mortgages.
[11] On March 31, 2020, these efforts were further expanded with a new program allowing these banks to use their holdings of US Treasury securities as collateral for overnight US dollar loans, in order to "help support the smooth functioning of the US Treasury market by providing an alternative temporary source of US dollars other than sales of securities in the open market".
However, the foreign central banks generally lend the dollars shortly after drawing on the swap line.
[citation needed] When a foreign central bank draws on its swap line to fund its dollar tender operations, it pays interest to the Federal Reserve in an amount equal to the interest the foreign central bank earns on its tender operations.
[9] The Federal Reserve Board issues a weekly release that includes information on the aggregate value of swap drawings outstanding.
Table 2 of the H.4.1 statistical release reports the remaining maturity of outstanding central bank liquidity swaps.
[18] In 2015, Argentina drew on the China swap line in order to bolster the country's foreign exchange reserves.