‘Other’ includes: Reserve Bank of Australia, Banco Central do Brasil, Danmarks Nationalbank, Bank of Korea, Banco de Mexico, Norges Bank, Reserve Bank of New Zealand, Monetary Authority of Singapore, and Sveriges Riksbank. This was just the scenario for which the swap lines had been designed. Put in place after the GFC, the standing swap lines allow five major central banks (The Bank of England, Bank of Japan, ECB, Swiss National Bank and Bank of Canada) to lend dollars to their local banks, confident in the knowledge that they can back those loans with dollars secured from the Federal Reserve, short-circuiting any market dysfunction. Most of the standing swap line central banks, including the Bank of England, provide weekly dollar auctions backed by the swap lines. But take up is usually minimal, because the auctions are intended only to be backstops when markets are working normally, and priced accordingly. But that was not the situation we faced in March. Over the days following that first call, as market conditions deteriorated further, we agreed on a package of measures to mobilise the swap lines more fully: extending the maturity, reducing the price, and increasing the frequency of our operations to ensure that dollars 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  continued to flow. The first part of this package was announced on Sunday 15 March, and further extended on 20 March. The Federal Reserve also agreed temporary arrangements with a further nine central banks.
And the sheer scale of the balance sheet interventions necessary in recent months pose important longer term questions. About the extent to which the non-bank financial system may still be capable of amplifying instability – for example through sudden non-bank deleveraging, runs on money market funds, or rigidities in dealer intermediation. And about the appropriate balance of responsibilities between the public and private sector for dealing with such vulnerabilities. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  I cannot give comprehensive answers to these questions today. But, in what follows, I have tried to provide some raw material for that exercise, illustrated using seven of the most vivid ‘moments’ from my own experience of the past few weeks. Moment 1: the first rumbles of thunder In the first week of March – the week before that fateful Friday 13th – we at the Bank had decided to move all of our market operations to full split site working, to reduce the risk of Covid-19 transmission. On Friday 6 March, as I was walking across the trading floor saying goodbye, my attention was drawn to a group of our foreign exchange reserves managers staring intently at their screens and talking animatedly. A big adjustment in financial markets had already been underway for some time, as expectations of slower demand caused by the global spread of the virus pulled down on equity and oil prices, and investors moved into safer assets, reducing yields (Chart 1). Market functioning had however mostly held up well.