Peer Reviewed Publications
‘Central Bankers in Crisis: Interpersonal Trust, Cooperation, and the Creation of the Fed Swap Network During the 2008 Global Financial Crisis.’ (2024). International Studies Quarterly, volume 68, issue 2. DOI: https://doi.org/10.1093/isq/sqae030
2022 Best Graduate Paper Award, International Political Economy Section of the International Studies Association. (Under previous title: This Time It’s Interpersonal: Central Bankers’ Cooperation and the Creation of the Fed Swap Network During the Global Financial Crisis)
Abstract:
How do policymakers respond to global crises? I argue that interpersonal trust enables policymakers to engage in ad hoc cooperation, in conditions of crisis and uncertainty. Specifically, leaders' differential ties—of stronger, looser, or absent—interpersonal trust influenced economies' access to Federal Reserve swap lines over costlier unilateral and multilateral alternatives during the 2008 Global Financial Crisis. Using this framework, I reexamine the emergence of the Fed swap network. I triangulate evidence from elite interviews with former central bankers in office during the crisis, and transcripts of Fed meetings. My findings highlight the role of interpersonal trust as an operating variable in shaping patterns of international cooperation, and problematize the politics of technocratic governance. While successful, in enacting these crisis management policies, central bankers reinforce hierarchies and secrecy in global governance. This article thus draws attention to the contentious and undemocratic underpinnings of the global financial safety net.
‘Drawing the Line: The Politics of Federal Currency Swaps in the Global Financial Crisis.’ (2019). Review of International Political Economy, volume 26, issue 3. DOI: https://doi.org/10.1080/09692290.2019.1572639
Abstract:
Injecting over two trillion dollars into the international economy, the Federal Reserve effectively operated as an international lender of last resort during the 2008 financial crisis. Over half a trillion dollars went to foreign central banks through bilateral arrangements known as Central Bank Liquidity Swaps. While studies show that a key determinant of a country’s chances of receiving Fed liquidity was the exposure of US banks to the foreign economy, the literature overlooks the ambiguous and politicized nature of the Fed’s decision-making that explains the selection of emerging market swap recipients. Through a consideration of all economies that officially requested a swap line, including those rejected, this article analyses the bilateral politics of Fed swaps. By evaluating transcripts of the Fed’s deliberations, it identifies strategic motivations underlying the Fed’s decision-making and argues the Fed was more likely to grant a swap to economies that shared its policy preferences for greater capital account openness. Further, the article argues that the influence of shared policy preferences was mediated by political and diplomatic considerations. The article concludes that the Fed strategically chose its emerging economy partners to reinforce economic alliances, particularly with those who experienced increased influence in economic governance post-2008.
Working Papers and Chapters
‘Central Bankers’ in The Routledge Handbook of the History of Central Banking. (Eds) Clemens Jobst and Stefano Ugolini. Routledge (Under Contract).
‘Thinking Locally, Acting Globally: The Domestic Legitimacy of the US Federal Reserve as a Global Governor.’ With Michael Allen, Stanford University.
Abstract:
The US Federal Reserve regularly acts as the international lender of last resort, but its independence is rooted only in its legitimacy as a domestic institution. What effect does the Fed's global activism have on the US public's trust in it as an independent agency? Using two pre-registered survey experiments, we evaluate the effect of informational cues about the Fed's international lending on respondents' level of policy support and overall trust in the Fed. We find that performance- and procedural-cues affect attitudes towards policy support and overall trust differently. Policy support is influenced by performance cues concerning its effectiveness and geopolitical implications. Institutional trust is unaffected by such performance cues but is influenced by cues expressing concern for the Fed's democratic accountability. Our findings contribute to debates on the popular sources of central bank independence as well as the literature on the legitimacy of domestic institutions in global governance.
‘The Limits of Economic Statecraft: China's Bilateral Swap Agreements and the External Security Environment.’ With Siyao Li, University of Pittsburgh, and Scott Wingo, The Bureau of Economic Analysis.
Abstract:
The People's Bank of China (PBoC) has signed forty-one bilateral swap arrangements (BSAs) with a diverse set of partner economies since 2009. Despite China's increasing economic clout, monetary cooperation in China's regional orbit has been limited. Why is the reach of China's monetary ambitions limited in its own neighbourhood? We argue that the scope of China's swap network is constrained by security and geopolitical considerations by China and its partners. Our argument hinges on two dimensions of interest: whether a state is a US ally and its geographic proximity to China. We build our argument using qualitative evidence from elite interviews with current and former financial leaders from China's swap counterparties, and test our argument quantitatively using a cross-national panel of China's BSAs. We find that the likelihood of signing BSAs is influenced by states' security relations with both the US and China. In particular, US allies closer to China's borders are less likely to cooperate with China through BSAs. States in a territorial dispute with China are also less likely to sign a BSA with China. Counterintuitively, our findings suggest that the growth of China's military power and of its ability to back its economic interests seem to constrain its choice of BSA partners in regions closer to China given existing US military alliances, and emerging conflict from China’s territorial pursuits in its immediate neighbourhood.
‘When Trust Disrupts! Subsystem Disjunctures and the End of Bretton Woods Revisited.’ With Jack Seddon, Waseda University.
Abstract:
Why do international monetary systems fail? Using the case of the collapse of the Bretton Woods system, we find that systems often experience two familiar problems that tend to worsen over time: first, rigid exchange rate commitments and sclerotic balance of payment adjustment mechanisms; and second, the expansion of ad hoc international credits and temporary fixes that dampen crises, ultimately erode system-trust. We present a historical analysis of this maladapted pattern to reveal three key sources of the growing disjuncture: discriminating constitutional pressures, time inconsistency problems, and bifurcated policy mal-adaption risks between disjointed intergovernmental and central bank sites of governance. These subsystem disjunctures when combined with a general over-reliance on ad hoc central bank policies to resolve crises produce self-undermining feedback effects that over time weaken the overall system. Using new IMF, OECD and BIS archival records, we trace out a series of mismatched trust-building efforts across divided governance subsystems that endogenously hollowed out the Bretton Woods system.
Work in Progress
‘It Takes Two to Swap: The Demand-Side Political Economy of the Bilateral Swap Network in the Global South.’ With Yumi Park, Copenhagen Business School.
Abstract:
Since 2010, an increasing number of emerging market economies have signed bilateral currency swap agreements (BSAs) with other developing countries. However, these countries are not well positioned to manage the risks associated with BSAs. Moreover, emerging market providers' selection of BSA recipients does not enable countries to “borrow credibility” or provide a credible signal to financial markets. To better understand their proliferation, then, we contend that these arrangements ought to be analyzed in the context of the multilayered Global Financial Safety Net. Using original data collected on the global BSA network, we evaluate the conditions under which Global South BSAs complement supplement alternative sources of financing from the IMF and Regional Financial Arrangements (RFAs). We find that South-South BSAs and IMF loans act as complements to BSAs from China. However, for countries that do not have an active loan from the IMF, China's BSAs operate as substitutes to IMF loans, conditional of IMF capacity. RFAs also decrease the likelihood of signing China's BSAs. Our argument highlights the demand-side political and economic motivations for signing China's BSAs in emerging and developing economies, in a context of fragmented governance. Our work adds to expanding knowledge about financial relations in the Global South.
‘Public Perceptions and Norm Diffusion in Central Bank Climate Policy.’
Abstract:
Under what conditions can central banks do climate policy? The United States Federal Reserve has taken a decidedly climate avoidant stance towards managing climate-related financial risks. Studies suggest domestic socio-political constraints impedes any Fed climate policy. Recent protests, however, suggest some appetite in the US public for a more activist central bank approach to climate change. This study aims to evaluate the extent to which public support for Fed climate policy is shaped by interpretations of the Fed's mandate. I also seek to evaluate whether information about proactive central bank climate policy abroad can generate support for the Fed climate policy. Using a mixed-methods approach of qualitative discourse analysis of Fed officials' speeches, I illustrate the domestic legitimacy concerns constraining Fed climate policy. I then propose a survey experiment, cuing respondents to the Fed's concerns and competing interpretations of its mandate, with additional information of central bank policy abroad, to identify sources of public support for the Fed to adopt a proactive climate policy. I expect that concerns about political independence will reduce support for possible climate policy, while informational cues about expanding its mandate to manage financial stability will increase support for climate policy. Finally, I expect that information about foreign central bank climate policies will increase support for the Fed to take on a more proactive climate stance. My study thus adds more nuance to domestic support for climate action, and identifies a a channel for norm diffusion through information about climate policy overseas.
‘Atlas Constrained: The (In)Effectiveness of China’s Renminbi Swap Program in a Dollar World.’
Abstract:
Since 2009, the People’s Bank of China has created an expanding network of currency swaps with its partners around the world to facilitate the internationalization of the renminbi, as a competitor to the US dollar. Many of China’s emerging and developing economy partners have also turned to China’s swaps to manage financial distress and to bolster their reserves. To what extent have these lines been effective in achieving the goals of both the provider and its vulnerable signatories? This paper evaluates the impact of China’s swaps on currency internationalization, as well as the effectiveness of these lines for signatories' financial health. I argue that while China's swap lines play an important window-dressing role, and provide important collateral for securing additional external financial assistance, the remain ineffective in meeting recipients' goals of diversifying their reserve portfolios and signalling improved financial health. The limited effectiveness of RMB swaps is a result of both China's domestic financial and political systems, as well as US dollar dominance. I adopt a mixed-methods strategy to support my claims, pairing case studies on Indonesia, Sri Lanka and Argentina, using qualitative interview evidence with current and former central bank governors, with quantitative tests of my argument. The analyses in this paper illustrate the limits of China’s monetary expansion in a dollar-centric world and its implications for the global South.