In many respects, the financial crisis that began in 2007 was one of global liquidity. Unprecedented stresses in global markets drove a worldwide flight into US dollars, leaving many banks high and dry, unable to access the dollar liquidity they desperately needed to roll over their funding. Financialisation had proceeded so far that there was no pool of reserves anywhere worldwide that was large enough to backstop the system. Only a lender of last resort would do.

The International Monetary