Points clés :

• I provide empirical evidence that the trilemma does not morph into a dilemma.
• I clarify the role of the global financial cycle in the trilemma. The sensitivity to the Global Financial Cycle depends less on the fluctuations of these financial forces than on the presence of global investors and global banks.
• When the country goes to the worst trilemma configuration, i.e. financially open and with pegged exchange rates, the high presence of one of this kind of global player doubles the initial impact of financial forces.

 Résumé :
This paper investigates the debate between the Mundellian trilemma and the dilemma. It focuses on the active role of the exchange rate regime. Overall, the global financial cycle magnifies the binding effect of financial openness on monetary policy autonomy, thus at the same time sharply reducing the effectiveness of the floating exchange rate regime to isolate the domestic economy against financial pressures. We provide empirical evidence that the trilemma does not morph into a dilemma. Furthermore, the sensitivity to the global financial cycle depends less on the fluctuations of these financial forces than on the presence of global investors and global banks.

 Mots-clés : Trilemma | Dilemma | Exchange-Rate Regime | Global Financial Cycle | Global Players

 JEL : E52, F32, F33, F38