Assume that the Eurozone begins coming apart with multiple countries defaulting on their Euro-denominated debt and abandoning the Euro to adopt their own currencies

The fedral reseve created by congress in 1913 .

fedral reserve influence the supply of money and credit.

regulate and supervise financial institutions

serve as bank and fiscal agent to the united states government

payment services to public through banks, depositry institutions ,credit unions, savingsand loans, clearing checks transferring funds

functions

conduct the nations montary policy

provide and maintain an effective payment system

supervise and regulate banking operations

If there is a distruptancy in the financial markets due to recession

Fedral reserve may go for dollar liquidity strap as it was not nothing new happend during 2007 central bank swap transactions have a long and well established financial history. Foreign central banks draw on this lines by selling foreign currency to the fedral reserve in exchange for dollars. The foreign central banks than lend this dollars to finacial institutions in their jurisdiction. At maturity the foreign central bank returns the dollar back to fedral reserve in exchange for its own currency at the same exchange rate previled at the time of initital draw and pay the interest also.

Fedral reserve bears no market pricing risk in these drawings since the swaps are designed so that fluctuations in exchange rate or interest rates have no effect on the payments made at the end of the transaction.

In general Fedral Reserve follow open market operations,lowering capital requirements, discount lending are the steps followed by fedral reserve during the times of recession

Fedral reserve generally seeks to credibly reassure market participents through its actions and public announcements that it will prevent or cushion its member banks and the finacial system from suffering too heavy loss by using the tools given above.