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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 available3 hearts4 challenges

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Post the entries

The Fed swaps $30bn to the Bank of Japan. Post the first leg.

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 7 placed

Pick an entry, then choose whose sheet it lands on and which side. Every sheet must balance.

Federal Reserve

Can create dollars

Assets

What it owns

  • Securities held outright$7T

    Liabilities

    What it owes

    • Bank reserves$3T

      Bank of Japan

      Cannot create dollars

      Assets

      What it owns

      • Japanese government bonds$500T

        Liabilities

        What it owes

        • Yen reserves owed to banks$400T

          Answer to continue.