I think the Eurodollar system is not as resilient as you seem to believe. This is a good article about it, from an obscure blogger, but one that presents a very convincing case:
"First of all, shadow banking is simply nonbanks (1. the REPO market, 2. money market funds) and non-US-banks (3. Eurodollars) that carry dollar-denominated "deposits" for customers (which are generally big companies; the little guy deposits his money in real banks, big players deposit big money in shadow banks). REPOs, Eurodollars and money market funds are all part of the shadow banking system."
...
"The financial crisis in 2008 was a bank run on the shadow banking system (a run from non-dollar "dollars" into real dollars). Lehman Brothers was a shadow bank that failed before the Fed and the USG backstopped the whole shadow banking system.
There was another financial crisis in March of 2020 that was also a bank run on the shadow banking system. There was a massive bailout, and no "banks" failed. There was also a pandemic underway, so most people didn't notice the financial crisis, even though the bailout was nominally larger than 2008. In both cases, the nonbank non-dollar "dollars" of the shadow banking system were backstopped with real dollars, but nothing was fixed. "
...
"One of the points Lev makes is that no one knows how big it actually is. Not even the Fed knows how many non-dollar "dollars" are out there. He says that's part of the reason they stopped reporting M3, because in reality, they have no idea how much "broad money" exists. In reality, the shadow banking system is likely too big to bail, not too big to fail."
...
"Lev thinks that another "quiet" bank run on the shadow banking system, especially outside of the US (i.e., Eurodollars), could be in the works. Remember, it's a bank run from non-dollar "dollars" into real dollars, which is why the dollar spikes during a run."
...
"Now, as you know, when you deposit your money, even at a real bank, you are essentially loaning your money to the bank. The bank doesn't put your money in a safe, it uses it for other purposes. The same goes for a company depositing $50 million into the REPO market through a nonbank broker-dealer. It is essentially loaning that $50 million to the broker-dealer. But it's not structured as a loan. It's structured as a purchase of a security with an agreement that the security will be repurchased by the broker-dealer the next day (what are called overnight, or O/N REPOs). The security you purchased for a night yields some rate of interest, but you don't get the interest directly from the security. Instead, your share of the interest is worked into the repurchase price of the security. You buy it today at $X, and we'll buy it back from you tomorrow at $X+Y, with Y being your interest rate on the deposit.
Because it's an overnight process, it has to be rolled over each day, and most of the time it is. If you want to withdraw some or all of your money, you simply don't roll it over that day. But remember, just like the bank doesn't keep your dollars in the safe, the REPO broker-dealer doesn't keep your $50 million in cash either. So, if you don't roll it over, the broker-dealer has to sell securities to raise the cash, and not all securities are created equal. Some are harder to sell than others, and if you can't sell enough to raise the cash during a bank run, you go broke. That's what happened to Lehman Brothers."
...
"And here's where the "quiet" bank run on the shadow banking system, especially outside the US, might have already begun. No one knows how big the non-US shadow banking system, aka the Eurodollar system, is. And as the value of the securities it holds to back its non-dollar "dollars" gets pushed down, the credibility of its "stablecoin-like peg" to the dollar gets drawn into question. As foreign entities holding large balances of Eurodollars try to move those funds into real dollars, or even just into something else or some other currency, the Eurodollar system is forced to sell securities and buy dollars on the open market, because it doesn't have access to the Fed's discount window or RRPs.
This puts further downward pressure on security prices, upward pressure on interest rates, and keeps driving the dollar higher and higher, making it more and more costly to obtain. And if the Eurodollar's peg was already in question, this makes it worse, in a vicious circle that may be difficult to stop, due to the unknown size of the Eurodollar system, if it really gets going."
I think the Eurodollar system is not as resilient as you seem to believe. This is a good article about it, from an obscure blogger, but one that presents a very convincing case:
https://fofoa.blogspot.com/2023/01/happy-new-year.html
Some quotes...
"First of all, shadow banking is simply nonbanks (1. the REPO market, 2. money market funds) and non-US-banks (3. Eurodollars) that carry dollar-denominated "deposits" for customers (which are generally big companies; the little guy deposits his money in real banks, big players deposit big money in shadow banks). REPOs, Eurodollars and money market funds are all part of the shadow banking system."
...
"The financial crisis in 2008 was a bank run on the shadow banking system (a run from non-dollar "dollars" into real dollars). Lehman Brothers was a shadow bank that failed before the Fed and the USG backstopped the whole shadow banking system.
There was another financial crisis in March of 2020 that was also a bank run on the shadow banking system. There was a massive bailout, and no "banks" failed. There was also a pandemic underway, so most people didn't notice the financial crisis, even though the bailout was nominally larger than 2008. In both cases, the nonbank non-dollar "dollars" of the shadow banking system were backstopped with real dollars, but nothing was fixed. "
...
"One of the points Lev makes is that no one knows how big it actually is. Not even the Fed knows how many non-dollar "dollars" are out there. He says that's part of the reason they stopped reporting M3, because in reality, they have no idea how much "broad money" exists. In reality, the shadow banking system is likely too big to bail, not too big to fail."
...
"Lev thinks that another "quiet" bank run on the shadow banking system, especially outside of the US (i.e., Eurodollars), could be in the works. Remember, it's a bank run from non-dollar "dollars" into real dollars, which is why the dollar spikes during a run."
...
"Now, as you know, when you deposit your money, even at a real bank, you are essentially loaning your money to the bank. The bank doesn't put your money in a safe, it uses it for other purposes. The same goes for a company depositing $50 million into the REPO market through a nonbank broker-dealer. It is essentially loaning that $50 million to the broker-dealer. But it's not structured as a loan. It's structured as a purchase of a security with an agreement that the security will be repurchased by the broker-dealer the next day (what are called overnight, or O/N REPOs). The security you purchased for a night yields some rate of interest, but you don't get the interest directly from the security. Instead, your share of the interest is worked into the repurchase price of the security. You buy it today at $X, and we'll buy it back from you tomorrow at $X+Y, with Y being your interest rate on the deposit.
Because it's an overnight process, it has to be rolled over each day, and most of the time it is. If you want to withdraw some or all of your money, you simply don't roll it over that day. But remember, just like the bank doesn't keep your dollars in the safe, the REPO broker-dealer doesn't keep your $50 million in cash either. So, if you don't roll it over, the broker-dealer has to sell securities to raise the cash, and not all securities are created equal. Some are harder to sell than others, and if you can't sell enough to raise the cash during a bank run, you go broke. That's what happened to Lehman Brothers."
...
"And here's where the "quiet" bank run on the shadow banking system, especially outside the US, might have already begun. No one knows how big the non-US shadow banking system, aka the Eurodollar system, is. And as the value of the securities it holds to back its non-dollar "dollars" gets pushed down, the credibility of its "stablecoin-like peg" to the dollar gets drawn into question. As foreign entities holding large balances of Eurodollars try to move those funds into real dollars, or even just into something else or some other currency, the Eurodollar system is forced to sell securities and buy dollars on the open market, because it doesn't have access to the Fed's discount window or RRPs.
This puts further downward pressure on security prices, upward pressure on interest rates, and keeps driving the dollar higher and higher, making it more and more costly to obtain. And if the Eurodollar's peg was already in question, this makes it worse, in a vicious circle that may be difficult to stop, due to the unknown size of the Eurodollar system, if it really gets going."