Glossary

Dollar liquidity (as power)

In a financial crisis, banks and firms outside the United States still need dollars — to settle trade, to refinance dollar debt, to meet collateral calls. Only the Federal Reserve can create dollars without limit. Whoever controls access to that liquidity in a crisis exercises a form of power most observers miss until it is being used. Adam Tooze develops this reading at length in *Crashed* (2018), arguing that the Fed's 2008 and 2020 dollar swap lines to selected foreign central banks were the decisive interventions that kept the global financial system from fragmenting — and that the choice of which central banks got swap lines (the ECB, BoE, BoJ, SNB, and a small expanded group) and which did not was a strategic act, not a technical one. The swap-line geography maps closely onto the US security alliance system. The same liquidity architecture explains why extraterritorial sanctions bite: banks that lose dollar correspondent access cannot fund their books in a crunch. The sanctions analyses on this site treat this liquidity dimension as the binding constraint, not the SWIFT messaging layer.