As dollars dry up, global finance is growing increasingly dependent on opaque currency trading to keep cash flowing.
Swaps users had a scare in September, when the U.S. Federal Reserve had to pump cash into markets as rates in the $2.2 trillion U.S. "repo" market spiked and spilled into FX swap markets, sending the premium to borrow dollars shooting higher.
Reflecting the increased reliance on currency markets to borrow dollars, FX swap volumes have grown to represent 49 percent of total currency trading, from 42 percent in 2013, Bank for International Settlements figures from August show.
While the IMF has "a very granular breakdown" of FX swap borrowing and risk managers typically perform stress tests on banks, Adrian said it remained a "worry".
The central bank official said stress tests implied some banks use swaps for more than 10 percent of their funding, while the BIS said dollars were on one side of 90 percent of all currency trades.
Before the 2008 financial crisis, the basis swap between the dollar and major currencies was negligible but has since ranged between minus-20-50 basis points, while in some countries it has moved beyond minus-100 bps, Adrian said.
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