Central Bankers in Crisis: Interpersonal Trust, Cooperation, and the Creation of the Fed Swap Network during the 2008 Global Financial Crisis.

This article examines how interpersonal trust among central bank leaders shaped the emergence and operation of the United States Federal Reserve's (Fed) bilateral currency swap network during the 2008 Global Financial Crisis (GFC). It argues that in conditions of radical uncertainty, such as the GFC, interpersonal trust enabled ad hoc cooperation and influenced which economies accessed cost-effective, conditionality-free Fed swap lines versus more costly alternatives like International Monetary Fund (IMF) loans. Drawing on elite interviews and Federal Open Market Committee (FOMC) transcripts, the study finds that stronger personal ties among leaders of advanced economies facilitated unconditional swaps, while looser trust relations led to limited swaps with safeguards, and absence of trust resulted in denied requests, notably for some emerging markets like India and Iceland. The article highlights the discretionary and political nature of these crisis management policies, emphasizing their role in reinforcing global financial hierarchies and raising concerns about the democratic legitimacy of central banking in global governance.