Crisis Architecture & The Global Dollar
The Fed Lends to Other Central Banks
How dollars reach a bank in Tokyo without the Fed taking any Japanese risk.
8 min80 XP available4 challenges
The Fed credits $30bn to the Bank of Japan and receives yen in return, at an exchange rate fixed now for the reversal. Four entries are needed — three of the seven do not belong.
Entries to post
0 of 4 entries placed
Pick an entry, then choose whose sheet it lands on and which side. Every sheet must balance.
Federal Reserve
Can create dollars
Central bankAssets
What it owns
- Securities held outright$7T
Liabilities
What it owes
- Bank reserves$3T
- Other liabilities and capital$4T
Bank of Japan
Cannot create dollars
Central bankAssets
What it owns
- Japanese government bonds$500T
Liabilities
What it owes
- Yen reserves owed to banks$400T
- Other liabilities and capital$100T
Answer to continue.