Day 2 Third Conference on the International Roles of the U.S. Dollar

The program continued on from yesterday (full agenda here). Sessions included papers on theoretical modeling of CIP deviations, the effect of swap line announcements on asset prices gleaned from high frequency data and new data on over the counter fx transactions. Once again a tremendous learning experience for me.

Session 4: Swap Lines

Chair: Linda Goldberg (Federal Reserve Bank of New York)

Dollar Shortages, CIP Deviations, and the Safe Haven Role of the Dollar
Presenter: Scott Davis (Federal Reserve Bank of Dallas)
Discussant: Ozge Akinci (Federal Reserve Bank of New York)

The High Frequency Effects of Dollar Swap Lines
Presenter: Moritz Lenel (Princeton University)
Discussant: Anusha Chari (University of North Carolina)

Session 5: Financial intermediary risk and payment systems

Chair: Fabiola Ravazzolo (Federal Reserve Bank of New York)

Payment-vs-payment bank settlement systems
Presenter: Angelo Ranaldo (St. Gallen University)

Closing Remarks

Stephanie Curcuru, Federal Reserve Board

17 thoughts on “Day 2 Third Conference on the International Roles of the U.S. Dollar”

  1. Macroduck

    Off topic – Tariffs:

    https://www.bloomberg.com/news/features/2024-05-21/latin-america-steel-tariffs-on-china-imports-show-relationship-strain

    Latin American countries are imposing new tariffs on Chinese steel. This is consistent with the expansion of Chinese exports to the so-called “global South”:

    https://asiatimes.com/2024/05/2-words-explain-china-export-surge-global-south/

    While U.S. tariffs are explainable in Great-Power-rivalry terms, tariffs elsewhere are probably in reaction to an export surge. Whatever the reason, there is at least a modest inflationary risk associated with tariffs – domestic and global.

    China’s export surge is quite possibly driven by slow demand at home. Small swings in China’s domestic consumption can drive large swing in trade flows because of China’s size. Efforts to limit imports of Chinese goods could impede China’s escape from it’s current economic troubles.

    1. pgl

      “Some of China’s export success in the developing world, to be sure, reflects a new kind of triangular trade motivated by the 25% tariff on some $200 billion of Chinese imports that the Trump administration imposed in 2019. China ships components and capital goods to Mexico, Vietnam, India and other countries, which then assemble them into finished products for sale in the United States.”

      We had to get Trump’s stupid trade war into this conversation!

      1. pgl

        I had been tolerating some of your past comments but no more. This comment is trolling pure and simple.

      2. Macroduck

        “Why not just ban coal products being shipped to China, to make their excess steel???”

        Perhaps because export restrictions are open to challenge under Article I, Section 9, Clause 5 of the Constitution – “No Tax or Duty shall be laid on Articles exported from any State”?

        C’mon. If you’re going to participate, take the discussion seriously.

  2. pgl

    Putin makes underwater land grab, risking direct conflict with NATO

    https://www.msn.com/en-us/news/world/putin-makes-underwater-land-grab-risking-direct-conflict-with-nato/ss-BB1mRhiY?ocid=msedgdhp&pc=U531&cvid=9c0e6c795fb747719eb5ea11fff3a493&ei=15

    Vladimir Putin looks set to make an underwater land grab by redrawing Russia ‘s maritime borders, further risking a direct conflict with NATO. According to a draft government decree, Russia’s defense ministry has proposed a revision to its borders in the Baltic Sea, drawing a rebuke from NATO-members Finland and Lithuania. Dated May 21, the decree shows the ministry proposed adjusting the border around Russian islands in the eastern part of the Gulf of Finland and around Kaliningrad.

    In other words, it is not just Ukraine.

    1. Macroduck

      Sweden thinks Putin is considering annexing Gotland:

      https://www.rnd.de/politik/russlands-krieg-schwedens-armeechef-warnt-vor-ostsee-fantasien-putins-ZBABCSCHYVE2THJPOFCPFDHCPY.html

      Gotland is in the Baltic, but not adjacent to Russia’s coast. What’s being suggested is an attack on a NATO member, in an effort to secure the Baltic as a Russian sea. The Swedish view is that the proposed extension of Russia’s maritime border is a first step in a wider land (water) grab.

      The standard view of such things, as I understand it (and what do I know?) is that Russia, while serious about expropriation territory, is also testing for NATO’s response. If NATO powers increase defenses in the Baltic, Russian mouthpieces will howl about the bad, mean, aggressive, bad, rude, bad West. It NATO doesn’t beef up defenses, Russia will grab more territory.

      This is, of course, similar to what Russia has done elsewhere, what China is attempting in the South China Sea and what Turkey is doing in the Aegean and Eastern Mediterranean.

      Sweden has already beefed up defenses on Gotland.

      1. pgl

        Putin has ‘both eyes’ on Gotland, warns Sweden’s army chief
        The Swedish island is strategically located in the Baltic Sea.

        https://www.politico.eu/article/russia-putin-eyes-sweden-gotland-baltic-sea-army-chief/

        Russian leader Vladimir Putin has his eyes on the Swedish island of Gotland, warned Sweden’s defense chief Micael Bydén.

        Gotland, Sweden’s largest island and comparable in size to the smallest U.S. state of Rhode Island, is strategically located in the middle of the Baltic Sea — between Stockholm and Russia’s Kaliningrad exclave.

        The Russian defense ministry announced a plan Tuesday to expand the country’s territorial waters in the Baltic Sea near its maritime border with Lithuania and Finland, sparking international concern.

        “I’m sure that Putin even has both eyes on Gotland. Putin’s goal is to gain control of the Baltic Sea,” Bydén, Sweden’s supreme commander of the armed forces, told newspapers of the German editorial network RND.

        “If Russia takes control and seals off the Baltic Sea, it would have an enormous impact on our lives — in Sweden and all other countries bordering the Baltic Sea. We can’t allow that,” Bydén said. “The Baltic Sea must not become Putin’s playground where he terrifies NATO members.”

        Russian shadow tankers have been a recent presence in Sweden’s exclusive economic zone off of Gotland’s eastern coast. The estimated 1,400-ship fleet operates outside the official maritime sector and isn’t officially part of any armed forces, so NATO has little power to act. Last month, Sweden said the European Commission would look into ways to deal with Russia’s shadow oil fleet in its next package of sanctions.

        After being demilitarized in 2005, Sweden re-introduced permanent troops to Gotland in 2016, following Russia’s annexation of Ukraine’s Crimean Peninsula in 2014. Sweden also became NATO’s newest member in March — meaning it is covered by the alliance’s Article 5 guarantee that all other members come to each other’s defense if they are attacked.

        But that has done little to stop Putin from taunting Russia’s neighbors in the Baltic.

        “If Putin invades Gotland, he can threaten NATO countries from the sea. That would be the end of peace and stability in the Nordic and Baltic regions,” Bydén said.

  3. Moses Herzog

    I keep wondering why there has been no mainstream media coverage of how Republicans failing for a full year to pass a military aid bill for Ukraine has emboldened Putin. It’s like “I don’t see anything, do you see anything?? No, I don’t see anything” Imagine Jimmy Carter or Bill Clinton pulling this same stunt as Russia invaded East Europe in live time. All the media would have just put blinders on??

    1. pgl

      I searched for what is being reported today. Besides overseas journalists, the only thing I saw was some HuffPost discussion. There was something in the AP back in June 2022 by a reporter in Denmark about the US/Sweden joint military drills. But not much else.

    1. Moses Herzog

      Gosh and a policeman too?? “Only the finest need apply”. But why do so many policemen like to beat up unarmed Blacks and their own wives?? Oh well “the blue” keep us safe in so many ways:
      https://www.kjrh.com/news/local-news/ohp-trooper-fired-after-being-accused-of-sexual-battery-during-traffic-stop

      Oh wow, and he turned off the dashcam too!?!?!? I am so shocked. A policeman turning off his dashcam?? That never happens in America. “To protect, serve, and sod*mize” Who knew?? She mainly spoke Spanish so it doesn’t count by MAGA law. Oklahoma is a Republican state so this is probably the officer “protecting the unborn child” in some form or fashion. One presumes……..

    1. pgl

      Interesting. A while back I tried to make this case to former troll JohnH. TSMC is a foundry aka a contract manufacturer and not does do the hard work of advanced product designs like Nvidia and others, which is an important distinction in this sector, which of course eluded Village Idiot JohnH.

      Now don’t get me wrong – TSMC has some cool process intangibles but such know how is not that hard to migrate especially when this company may be opening chip factories in the US.

    2. Moses Herzog

      I have thought for quite awhile now that some form of “self-destruct” button on Taiwan’s sophisticated chips is one of the better if not the best self-defense maneuvers against China that Taiwan has. I think I read it in some Navy College research paper. Strikes me as pretty damned sharp.

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