According to Visual Capitalist, around the world, there is $65 trillion in unrecorded dollar debt in the form of foreign-exchang
25 May 2023, 08:59
According to Visual Capitalist, around the world, there is $65 trillion in unrecorded dollar debt in the form of foreign-exchange swaps, which have grown due to years of monetary easing and ultra-low interest rates. šø
The value of unrecorded debt is staggering and the risk of growing dollar debt and these swap lines arises when a non-U.S. bank or shadow bank may not be able to hold up their end of the agreement, potentially undermining financial market stability.
The massive growth in dollar debt presents risks as it did during the market crashes of 2008 and 2020, where forex swaps faced a funding squeeze due to extreme volatility.
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