As politicians and parliaments struggle with the economic catastrophe brought on by the coronavirus pandemic, central banks have reached for the playbook of the 2008 global financial crisis. They are pumping liquidity into the banking system and trying to prop up key asset markets with large-scale purchases. This is helping to staunch the panic, but the shock is a global one — and it needs a global response.

For the second time this century, the world is facing an acute shortage of dollar funding. This is a big problem: An enormous amount of global financial activity depends on the use of the dollar. If we are to contain the fallout from the crisis, America’s central bank must act as a lender of last resort not just to America’s financial system but also to the entire world’s.

Read the full article at the New York Times