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91. Improving International Policy Coordination in the Wake of the Financial Crisis.

Author:
Jonathan Burks
Publication Date:
05-2010
Content Type:
Journal Article
Journal:
Woodrow Wilson School Journal of Public and International Affairs
Institution:
Woodrow Wilson School of Public and International Affairs, Princeton University
Abstract:
The on going financial crisis has exposed the weaknesses of the risk management practices pervasive in the financial industry and the limitations of a domestic regulatory structure that fails to provide any federal regulator with the responsibility and authority to comprehensively oversee the financial system. Of course these problems have not been limited to the United States, as banks based abroad, like UBS, and economies around the world have also been shaken by the crisis. The crisis has also exposed the shortcomings of the international regime for economic and financial policy coordination.
Topic:
Economics and Financial Crisis
Political Geography:
United States

92. Russia's Financial Crisis: Economic Setbacks and Policy Responses

Author:
Padma Desai
Publication Date:
06-2010
Content Type:
Journal Article
Journal:
Journal of International Affairs
Institution:
School of International and Public Affairs, Columbia University
Abstract:
The financial turmoil originating from the U.S. subprime mortgage crisis hit Russia by early September 2008, prompting the Russian government and the Central Bank of Russia to undertake a set of speedy and concerted measures to soften the impact of the crisis. These initial measures supported the value of the ruble as ruble holders, domestic and foreign, switched to dollars. They also provided hard currency to major Russian banks and Russian big business (the so-called oligarchs) which had borrowed heavily from foreign banks for their expanding operations from 2000 to 2007.
Topic:
Government and Financial Crisis
Political Geography:
Russia and United States

93. An Update on EU Financial Reforms

Author:
Nicolas Véron
Publication Date:
12-2010
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the context of a transatlantic comparison, the first thing to be mentioned is the difference between the time sequence of financial reforms in the European Union and its equivalent in the United States. The financial crisis started simultaneously on both sides of the Atlantic, with the initial disruption of some financial market segments in August 2007 and the major panic episode of September through October 2008. But they are not at the same stage of policy reaction and especially regulatory reform now. At least four reasons can be identified for this difference.
Topic:
Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
United States and Europe

94. Toward Institutional Innovation in US Labor Market Policy: Learning from Europe?

Author:
Tobias Schulze-Cleven and Henry Farrell
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
What keeps US labor market institutions from more effectively helping the nation cope with the current economic crisis and secure its future prosperity? What is the scope for politically feasible innovation in US labor market policy? These are crucial policy questions. As a result of the global financial crisis, the US unemployment rate climbed into double digits and has remained higher than in many European countries. The US is experiencing the highest level of unemployment for a generation and the highest rate of long-term unemployment for more than half a century. American families are suffering from financial hardship without any fault of their own, and many of the currently unemployed will find it hard to re-enter the workforce during the recovery. Nor is the government easily able to use current programs to help those seeking work. Even though policymakers have launched new initiatives during the past year, the US remains almost uniquely weak among advanced industrialized democracies in its lack of policy programs to support the populace in successfully engaging with the labor market.
Topic:
Economics, Markets, Labor Issues, and Financial Crisis
Political Geography:
United States and Europe

95. The Impact of the Crisis on the Real Economy

Author:
Daniel Gros and Cinzia Alcidi
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This crisis was caused by a combination of asset price bubbles, mainly in the real estate sector, and a credit bubble that led to excessive leverage. This is wellknown. What is less well-known is that on both accounts the euro area was affected by both 'bubble' symptoms as much as the US.
Topic:
Economics, Markets, and Financial Crisis
Political Geography:
United States and Europe

96. Comparing EU and US Responses to the Financial Crisis

Author:
Karel Lannoo
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Since 2003, the EU and the US have conducted a vibrant regulatory dialogue on financial regulation, but domestic priorities seem to have taken precedence in response to the financial crisis. This paper compares the institutional and regulatory changes occurring on both sides of the Atlantic. On the institutional side, it compares macro- and micro-prudential reforms. On the regulatory side, it compares four key areas: bank capital requirements, reform of the OTC derivative markets, and the regulation of credit ratings agencies and hedge funds. It concludes by highlighting certain implications for the regulatory dialogue.
Topic:
Economics, Monetary Policy, and Financial Crisis
Political Geography:
United States and Europe

97. Capital flows, the carry trade and 'sand in the wheels'

Author:
Stephen Grenville
Publication Date:
02-2010
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
The 'carry trade', in which capital shifts from countries with low interest rates to countries with significantly higher rates, has become an important element of international capital flows over the past decade. With low interest rates in the United States, Japan, the UK and much of the rest of Europe expected to persist for some time, these flows seem likely to become larger in the aftermath of the Global Financial Crisis. Particularly for the emerging countries with shallow financial markets, interest-sensitive inflows have the potential to be disruptive. Exchange rates will tend to be overvalued for sustained periods, punctuated by sharp depreciations. These distorted and varying price signals will be unhelpful for good policy-making and steady economic growth.
Topic:
Emerging Markets, Globalization, International Trade and Finance, Foreign Direct Investment, and Financial Crisis
Political Geography:
United States, Japan, United Kingdom, and Europe

98. The Sustainability of China's Recovery from the Global Recession

Author:
Nicholas R. Lardy
Publication Date:
03-2010
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
China's policy response to the global financial and economic crisis was early, large, and well-designed. Although Chinese financial institutions had little exposure to the toxic financial assets that brought down many large Western investment banks and other financial firms, China's leadership recognized that its dependence on exports meant that it was acutely vulnerable to a global recession. Thus they did not subscribe to the view sometimes described as “decoupling,” the idea that Asian countries could passively weather the financial storm that originated in the United States and other advanced industrial economies. They understood that absent a vigorous policy response China inevitably would suffer from the backwash of a sharp economic slowdown in its largest export markets—the United States and Europe.
Topic:
Economics and Financial Crisis
Political Geography:
United States, China, Europe, and Asia

99. The Year Ahead

Author:
John H. Makin
Publication Date:
01-2010
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
We can expect 2010 to be a volatile year. This likelihood is underscored by looking back at 2008 and 2009. Two thousand eight was a highly volatile year leading up to the collapse of Lehman Brothers in September, which was followed by the risk of a total systemic meltdown. That sharp and obvious risk spike prompted massive policy responses that were simply the largest that central banks, with rate cuts and liquidity provision, and governments, with tax cuts and spending increases, could manage. The result—beginning in March 2009—was a linear rise in the prices of risky assets, the result of massive relief once the slip into a global depression had been averted and the acute phase of the crisis in the financial sector had passed.
Topic:
Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, Japan, China, and Europe

100. Prime Brokers and Derivatives Dealers

Publication Date:
04-2010
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Runs by prime-brokerage clients and derivatives counterparties were a central cause of the World Financial Crisis. Worried about potential losses, many hedge funds withdrew their assets from brokerage accounts at Bear Stearns and Lehman Brothers in the weeks before these banks failed. Although Morgan Stanley did not fail, it also suffered from the withdrawal of prime brokerage assets. These runs, together with runs by short-term creditors, precipitated Bear Stearns' and Lehman's demise. Even if these firms would have failed anyway, the runs made their failures much more sudden and chaotic, and made coherent policy responses much harder.
Topic:
Economics, Markets, and Financial Crisis
Political Geography:
United States