In such a situation, the economy of the key currency is easily tempted to focus its economic policy on domestic considerations. In today’s globalized economy, this could lead to undesirable ripple effects on the rest of the world, through the fluctuations of the external value of the key currency.
A natural temptation for a banker when facing pressures for earnings growth would be to extend maturities in search of more attractive rates of return. I'd like to say a few cautionary words about this temptation.