LONDON, Dec 5 Reuters Pension funds and other 39;nonbank39; financial firms have more than 80 trillion of hidden, offbalance sheet dollar debt in FX swaps, the Bank for International Settlements BIS said.

The BIS, dubbed the central bank to the world39;s central banks, also said in its latest quarterly report that 202239;s market upheaval had largely been navigated without major issues.

Having repeatedly urged central banks to act forcefully to dampen inflation, it struck a more measured tone and picked over crypto market troubles and September39;s UK bond market turmoil.

Its main warning concerned what it described as the FX swap debt blind spot that risked leaving policymakers in a fog.

FX swap markets, where for example a Dutch pension fund or Japanese insurer borrows dollars and lends euro or yen before later repaying them, have a history of problems.

They saw funding squeezes during both the global financial crisis and again in March 2020 when the COVID19 pandemic wrought havoc that required central banks such as the U.S. Federal Reserve to intervene with dollar swap lines.

The 80 trillionplus hidden debt estimate exceeds the stocks of dollar Treasury bills, repo and commercial paper combined, the BIS said. It has grown from just over 55 trillion a decade ago, while the churn of FX swap deals was almost 5 trillion a day in April, two thirds of daily global FX turnover.

For both nonU.S. banks and nonU.S. 39;nonbanks39; such as pension funds, dollar obligations…