The Impact of Federal Reserve Liquidity Swap-lines on the Global Financial

This study's focus is to identify the issuance of currency swaps by the Federal Reserve and the financial stress over the period of 15 years (2005-2020). Since most of the central banks of various countries have undergone significant changes due to the consequences of the global financial crisis in 2008, the Federal Reserve decided to issue swap lines to solve the issue of the lack of liquidity in the global financial markets. In my research, I used OFR FSI to measure global financial stress and defined swaps to check the causality between them. My time series dataset includes information from both the Federal Reserve and OFR FSI. The research is based on subsequent stages: running the Granger Causality Test with 2 unrestricted and 2 restricted regressions with lagged variables, calculating F-statistic and comparing it with the critical value to reject one of the hypotheses, making conclusions about the absence of the reverse causality. The VAR model is also constructed and the corresponding conclusions are made.