The current architecture of the global economy owes much to the actions of central banks. Since the early 1980s, with the progressive financialization of the global economy, they have taken ownership of issues related to financial and macroeconomic regulation. Monetary policy has thus become the key tool.
The framework established was based on operating and intervention methods that were fairly consistent from one central bank to another. The central bank’s objective was everywhere calibrated to inflation, with an identical target everywhere. The Fed has an explicit dual objective; for other central banks, this second objective, on activity, is implicit.

Since the Plaza Accord of September 1985, they have intervened in a coordinated manner when a negative shock occurs. The goal is to provide sufficient liquidity to prevent the shock from spreading and turning into a deep and lasting crisis.

The question today is that of the Kindleberger trap: if the Fed no longer plays or can no longer play the role of lender of last resort, then in the event of a negative shock, the global dynamic would be blocked at the risk of seeing the shock transform into a lasting crisis.
This question does not arise immediately, as Jay Powell, at the helm of the Fed, does not wish to change this international framework. However, one might think that in the event of a change within the Fed’s board and in the particular political context of the USA, the Fed could be prevented from intervening with the margins and leadership that are its own.

This change would be radical, given that during the shocks of the past 40 years, the Fed has implemented liquidity lines with other central banks. The amounts have been considerable: $600 billion in 2008 and $450 billion in 2020.

In a recent paper published by CEPR, Robert N McCauley imagines that the 14 other central banks, associated with these liquidity lines, pool their reserves amounting to 1.9 trillion dollars to plug the gaps in the event of a negative shock.
The idea is that if the Fed is unwilling/unable to intervene directly, other central banks could bypass this and allow the economy to cushion the blow. There’s no need to create new dollars, but to exchange those in reserve to plug the weaknesses in the entire system.
The Fed would act as a passive actor, because the reserves held are housed in US assets over which the Fed may wish to have regulatory power (e.g., government bonds).

This would be a way, according to the author, to counteract the Kindleberger trap if it appeared due to the withdrawal of the United States.
The circulation of reserves would limit the risks of contagion but would be a second-best solution less effective than direct intervention by the Fed.

To be continued