The financial crisis that began in August 2007 has blurred the sharp distinction between monetary and financial stability. It has also led to a revival of practical central bank co-operation. This paper explains how things have changed. The main innovation in central bank cooperation during this...

In this paper we discuss the main innovation in central bank cooperation during the financial crisis of 2008-09, namely the emergency provision of international liquidity through the establishment of bilateral central bank swap facilities, which have evolved to form interconnected swap networks....