Why are Fed dollar swap lines so important

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Cross-posted from FTAlphaville:

Few things are as likely to imbue us with that sense of global financial crisis déjà-vu than a dollar swap line.

Last night the Federal Reserve announced it was easing the terms on which it provides foreign banks access to greenbacks.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.