Thus, instead of contributing to better risk diversification, these new financial instruments simply disguised those risks. We were aware of these imbalances. There was no shortage of early warnings. As long ago as 2005 the ECB warned of the excessive growth of credit. There were also warnings on the other side of the Atlantic that the US economy was skating on thin ice.
To facilitate the channeling of dollar liquidity to foreign financial institutions operating in the United States and to meet all appropriate demands for dollar liquidity, thirty-day currency swap lines were arranged with major central banks, again in record volume.