Constitutional Liquitity Power

Abstract: This paper develops the concept of Constitutionalized Liquidity Power (CLP) to explain how the United States sustains global financial order through a constitutionally embedded capacity to mobilize emergency liquidity. We argue that U.S. power hinges on a dual mode of action: a normal mode, constrained by statutes, Congress, and administrative law; and an exception mode, in which executive–monetary coordination (Treasury–Federal Reserve) expands discretionary authority far beyond what domestic law alone appears to permit. Using comparative case studies—TARP 2008, the Eurozone sovereign crisis, Japan’s post-2013 regime, and China’s credit-based model—we show that only the United States combines global collateral, institutional autonomy, and executive crisis discretion in a single architecture. We further demonstrate that current Supreme Court challenges, especially the pending IEEPA case, may redefine the permissible scope of emergency liquidity action, with consequences not only for U.S. separation of powers but for global financial stability itself. CLP thus reveals how domestic constitutional structures shape international hierarchy—and why the 2020s represent a transitional macro-order where the foundations of liquidity sovereignty are contested and potentially remade.