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To: Enterprise
If these countries can’t pay us back can we repossess them?

We swapped equivalent amounts of currency. It's not like we have no collateral.

12 posted on 02/01/2009 8:10:01 PM PST by Toddsterpatriot (Havoc has been back since September. Or was it April?)
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To: Toddsterpatriot

Exactly right. That’s why it doesn’t show up as a liability - in fact, it shows up on the Fed’s balance sheet as “Other Federal Reserve Assets” or some such.

Since this is a swap between central banks, there is (supposedly) no counterparty risk.


14 posted on 02/01/2009 8:27:50 PM PST by NVDave
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To: Toddsterpatriot

I forgot to mention that the outgoing swap to the ECB (or other bank) shows up as as liability.

The net:net effect is that the balance sheet hasn’t changed. It just got moved around.


15 posted on 02/01/2009 8:29:14 PM PST by NVDave
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