Part 11/14:

The crisis was exacerbated by the globalized nature of modern finance, especially the Eurodollar system, where dollars are not tied solely to U.S. monetary policy but are part of an international ecosystem of liabilities and obligations. When liquidity evaporated in Europe and other regions, it rippled across the world, underscoring that this was a global monetary problem.

Furthermore, policymakers' ignorance of the inner mechanics of the Eurodollar system meant that their remedies—interest rate cuts, asset purchases—were insufficient or misdirected. They failed to address systemic liquidity or the fundamental issue: the breakdown of global dollar liquidity.