Crashed

by Adam Tooze

  25. R. Wade, “Financial Regime Change?,” New Left Review 53 (September/October 2008).

  26. “Financial Regulation: Industry Changes Prompt Need to Reconsider US Regulatory Structure,” US Government Accountability Office, GAO-05-61, October 6, 2004.

  27. A. Baker, “Restraining Regulatory Capture? Angloamerica, Crisis Politics and Trajectories of Change in Global Financial Governance,” International Affairs 86 (2010), 647–663.

  28. Wade, “Financial Regime Change?”

  29. M. Singh and J. Aitken, “The (Sizable) Role of Rehypothecation in the Shadow Banking System” (IMF Working Paper WP/10/172, July 2010).

  30. Green, “Anglo-American Development.”

  31. M. Hirsch, Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street (Hoboken, NJ: Wiley, 2010), 200.

  32. Zaki, UBS, 75.

  33. L. S. Talani, “The Impact of the Global Financial Crisis on the City of London: Towards the End of Hegemony?,” Competition and Change 15 (February 2011), 11–30.

  34. D. K. Tarullo, “Regulating Large Foreign Banking Organizations,” Harvard Law School Symposium on Building the Financial System of the Twenty-first Century: An Agenda for Europe and the United States, March 27, 2014.

  35. “Rating Action: Moody’s Downgrades Depfa Entities to A2, BFSR at D+,” Moody’s Investors Service, September 30, 2008.

  36. G. Robinson, “Hypo to Buy Depfa Bank for €5.7bn,” Financial Times, July 23, 2007.

  37. W. Munchau, The Meltdown Years (Munich: McGraw-Hill, 2010), 19–28.

  38. D. K. Tarullo, “Banking on Basel,” Peterson Institute for International Economics, 2008.

  39. R. Abdelal, Capital Rules: The Construction of Global Finance (Cambridge, MA: Harvard University Press, 2007), 88.

  40. Abdelal, Capital Rules, 193–194.

  41. A. Blundell-Wignall, P. Atkinson and S. H. Lee, “The Current Financial Crisis: Causes and Policy Issues,”’ OECD Financial Markets Trends (2008).

  42. A. Blundell-Wignall and P. Atkinson, “The Subprime Crisis: Causal Distortions and Regulatory Reform” (2008), in P. Bloxham and C. Kent, Lessons from the Financial Turmoil of 2007 and 2008, proceedings of a conference, Reserve Bank of Australia, Sydney.

  43. “The AIG Rescue, Its Impact on Markets, and the Government’s Exit Strategy,” 111th Cong., US Government Printing Office, June 10, 2010; and R. Peston, “How Banks Depend on AIG,” BBC News, September 16, 2008.

  44. “The AIG Rescue, Its Impact on Markets,” 111th Cong.

  45. A. Baker, “Restraining Regulatory Capture? Anglo-America, Crisis Politics and Trajectories of Change in Global Financial Governance,” International Affairs 86 (2010), 647–663.

  46. M. Thiemann, “In the Shadow of Basel: How Competitive Politics Bred the Crisis,” Review of International Political Economy (February 5, 2014), 1203–1239.

  47. M. Berlin, “New Rules for Foreign Banks: What’s at Stake?,” Business Review, Federal Reserve of Philadelphia, 2015; and “Letter SR 01-1: Application of the Board’s Capital Adequacy Guidelines to Bank Holding Companies Owned by Foreign Banking Organizations,” Board of Governors of the Federal Reserve System, January 5, 2001, https://www.federalreserve.gov/boarddocs/srletters/2001/sr0101.htm.

  48. S. Bair (speech, Risk Management and Allocation Conference, July 25, 2007).

  49. S. Bair, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself (New York: Free Press, 2012), 38–39.

  50. S. G. Cecchetti, “Five Years in the Tower” (speech, BIS Annual Conference, 2013). In 2008 Deutsche’s leverage would soar to 70:1. On UBS, see Zaki, UBS, 117.

  51. C. Hughes and J. Grant, “City Limits: London Counts the Cost of Six Stormy Months for Banks,” Financial Times, January 20, 2008.

  52. J. R. Dearie and G. J. Vojta, “Reform and Modernization of Financial Supervision in the United States: A Competitive and Prudential Imperative,” Mimeo, 2007.

  53. A. Appadurai, Banking on Words: The Failure of Language in the Age of Derivative Finance (Chicago: University of Chicago Press, 2015).

  54. P. Blustein, The Chastening: Inside the Crisis That Rocked the Global Financial System and Humbled the IMF (New York: PublicAffairs, 2003).

  55. Roche, Histoire secrete d’un krach qui dure, 99–100; and P. Blustein, Off Balance, 113–114.

  56. M. Obstfeld, J. C. Shambaugh and A. M. Taylor, “Financial Instability, Reserves, and Central Bank Swap Lines in the Panic of 2008” (NBER Working Paper 14826, 2009).

  57. P. McGuire and G. von Peter, “The US Dollar Shortage in Global Banking,” BIS Quarterly Review, March 2009.

  58. For a review of the arguments see J. Aizenman and L. Jaewoo, “Financial Versus Monetary Mercantilism: Long-Run View of Large International Reserves Hoarding,” World Economy 31 (2008), 593–611.

  CHAPTER 4: EUROZONE

  1. The most authoritative history is H. James, Making the European Monetary Union (Cambridge, MA: Harvard University Press, 2012); a useful economist’s introduction is J. Pisani-Ferry, The Euro Crisis and Its Aftermath (Oxford: Oxford University Press, 2014). On the politics see D. Marsh, The Euro: Battle for the New Global Currency (New Haven, CT: Yale University Press, 2009).

  2. R. Abdelal, Capital Rules: The Construction of Global Finance (Cambridge, MA: Harvard University Press, 2007).

  3. M. E. Sarotte, 1989: The Struggle to Create Post-Cold War Europe (Princeton, NJ: Princeton University Press, 2009).

  4. Among many others, T. Mayer, Europe’s Unfinished Currency: The Political Economics of the Euro (New York: Anthem Press, 2012). The author was chief economist at Deutsche Bank from 2009–2012.

  5. A concern expressed early by D. Gros, “Will EMU Survive 2010?,” Center for European Policy Studies, January 17, 2006.

  6. T. Bayoumi and B. Eichengreen, “Shocking Aspects of European Monetary Unification” (NBER Working Paper 3949, 1992).

  7. M. Feldstein, “The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability,” Journal of Economic Perspectives 11 (1997), 23–42.

  8. U. G. Silveri, “Italy 1990–2014: The Transition That Never Happened,” Journal of Modern Italian Studies 20 (2015), 171–175.

  9. K. Dyson and K. Featherstone, “Italy and EMU as a ‘Vincolo Esterno’: Empowering the Technocrats, Transforming the State,” South European Society and Politics 1.2 (1996), 272–299.

  10. “The Sick Man of the Euro,” Economist, June 3, 1999.

  11. R. R. G. Heinze, Blockierte Gesellschaft (Opladen: VS Verlag, 1998); and K. v. Hammerstein et al., “Die blockierte Republik,” Der Spiegel, September 21, 2002.

  12. A. Hassel and C. Schiller, Der Fall Hartz IV (Frankfurt: Campus, 2010); and S. Beck and C. Scherrer, “Der rot-grüne Einstieg in den Abschied vom ‘Modell Deutschland’: Ein Erklärungsversuch,” Prokla 35 (2005), 111–130.

  13. S. Dullien, “A German Model for Europe?,” European Council on Foreign Relations, July 1, 2013.

  14. M. Fratzscher, Verteilungskampf: Warum Deutschland immer ungleicher wird (Munich: Carl Hanser, 2016); and C. Odendahl, “The Hartz Myth: A Closer Look at Germany’s Labour Market Reforms,” Center for European Reform, June 2017.

  15. H. Geiling, ed., Die Krise der SPD: autoritäre oder partizipatorische Demokratie (Münster: LIT, 2010).

  16. A. Crawford, Angela Merkel: A Chancellorship Forged in Crisis (Sussex: Bloomberg Press, 2013); and M. Qvortrup, Angela Merkel: Europe’s Most Influential Leader (New York: Overlook Press, 2016).

  17. “The Merkel Plan,” Economist, June 15, 2013.

  18. Rede von Bundeskanzlerin, “Dr. Angela Merkel beim Weltwirtschaftsforum am,” January 25, 2006 in Davos, https://www.bundesregierung.de/Content/DE/Bulletin/2001_2007/2006/01/07-1-Merkel.html.

  19. C. Egle and R. Zohlnhöfer, eds., Die zweite Gro
ße Koalition: eine Bilanz der Regierung Merkel 2005–2009 (Wiesbaden: VS Verlag für Sozialwissenschaften, 2010).

  20. Peer Steinbrück, Unterm strich (Hamburg: Hoffmann und Campe, 2010).

  21. A term launched by Colin Crouch in 2000 that acquired far more traction in Germany than in the Anglosphere. C. Crouch, “Coping with Post-Democracy,” Fabian Ideas, no. 598 (2000); C. Crouch, Post-Democracy (Cambridge: Polity, 2004); and “Postdemokratie?,” Aus Politik und Zeitgeschichte, February 1, 2011.

  22. S. Lessenich, “Die Kosten der Einheit,” Bundeszentrale für politische Bildung, March 30, 2010.

  23. “Steinbrück setzt auf schwarze Null,” Der Tagesspiegel, July 4, 2007.

  24. W. Wolfrum, Rot-Grün an der Macht: Deutschland 1998–2005 (Munich: C. H. Beck, 2013).

  25. For an insightful but uncritical portrait, see N. Irwin, The Alchemists: Three Central Bankers and a World on Fire (New York: Penguin, 2013).

  26. C. Ban, Ruling Ideas: How Global Neoliberalism Goes Local (Oxford: Oxford University Press, 2016).

  27. D. Gabor and C. Ban, “Banking on Bonds: The New Links Between States and Markets,” Journal of Common Market Studies 54 (2015), 617–635.

  28. S. Cheun, I. von Köppen-Mertes, and B. Weller, “The Collateral Frameworks of the Eurosystem, the Federal Reserve System and the Bank of England and the Financial Market Turmoil,” Occasional Paper No. 107, European Central Bank, 2009; and D. Gabor, “The Power of Collateral: The ECB and Bank Funding Strategies in Crisis,” (May 18, 2012), available at SSRN: https://ssrn.com/abstract=2062315 or http://dx.doi.org/10.2139/ssrn.2062315.

  29. W. Buiter and A. Sibert, “How the Eurosystem’s Treatment of Collateral in Its Open Market Operations Weakens Fiscal Discipline in the Eurozone (and What to Do About It),” CEPR Discussion Papers No. 5387, 2005; and the discussion in Schelkle, Political Economy of Monetary Solidarity, 145–148.

  30. For two instances, Bernanke, Courage to Act, 477; and M. Lewis on Greece, the Eurozone and the implicit German guarantee, “How the Financial Crisis Created a ‘New Third World,’” NPR Fresh Air, September 30, 2011, http://www.npr.org/templates/transcript/transcript.php?storyId=140948138.

  31. S. Storm and C. W. Naastepad, “Myths, Mix-ups and Mishandlings: What Caused the Eurozone Crisis?,” Institute for New Economic Thinking Annual Conference, April 11, 2015, table 2.

  32. P. Lourtie, “Understanding Portugal in the Context of the Euro Crisis,” in Resolving the European Debt Crisis, ed. W. R. Cline and G. Wolff (Washington, DC: PIIE, 2012).

  33. C. Wyplosz and S. Sgherri, “The IMF’s Role in Greece in the Context of the 2010 Stand-By Arrangement,” Independent Evaluation Office of the IMF, BP/16-02/11, 2016.

  34. S. Kalyvas, Modern Greece: What Everyone Needs to Know (Oxford: Oxford University Press, 2015); and M. Husson, “The Greek Public Debt Before the Crisis,” March 2015, http://hussonet.free.fr/graudite.pdf.

  35. Sandbu, Europe’s Orphan, 24.

  36. P. R. Lane, “Capital Flows in the Euro Area,” Economic Papers 497 (April 2013).

  37. G. Gorton and A. Metrick, “Securitization” (2011), in Handbook of the Economics of Finance, ed. G. Constantinides, M. Harris and R. Stulz (North Holland: Elsevier, 2012); and T. Santos, “Antes del Diluvio: The Spanish Banking System in the First Decade of the Euro,” in After the Flood: How the Great Recession Changed Economic Thought, Edward L. Glaeser, Tano Santos and Glenn Weyl, eds. (Chicago: University of Chicago Press, 2017).

  38. Schelkle, Political Economy of Monetary Solidarity, 180–185.

  39. Storm and Naastepad, “Myths, Mix-ups and Mishandlings.”

  40. P. R. Lane, “The Funding of the Irish Domestic Banking System During the Boom,” Journal of the Statistical and Social Inquiry Society of Ireland 44 (2014), 40–71.

  41. S. Royo, “How Did the Spanish Financial System Survive the First Stage of the Global Crisis?,” Governance 26 (October 2013), 631–656; Santos, “Antes del Diluvio.”

  42. A. Cárdenas, “The Spanish Savings Bank Crisis: History, Causes and Responses” (Working Paper 13-003, Universitat Oberta de Catalunya, 2013); and Santos, “Antes del Diluvio.”

  43. T. Santos, “El Diluvio: The Spanish Banking Crisis, 2008–2012,” manuscript, Columbia Business School, Columbia University (2017).

  44. Santos, “Antes del Diluvio.”

  45. I. Jack, “Ireland: The Rise and the Crash,” New York Review of Books, November 11, 2010, reviewing F. O’Toole, Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger (London: Faber and Faber, 2009).

  46. P. De Grauwe, “How to Embed the Eurozone in a Political Union,” Vox, June 17, 2010. For a devastating review of the blindspots of conventional theories of optimum currency area and their insistence on fiscal integration see Schelkle, Political Economy of Monetary Solidarity, 174–179. For a review of discussions about financial stabilization following the Maastricht Treaty of 1992 see M. Obstfeld, “Finance at Center Stage: Some Lessons of the Euro Crisis,” Directorate General Economic and Financial Affairs No. 493 (DG ECFIN), European Commission, 2013.

  47. For an alarmingly bland summary of the EU’s precautionary arrangements see ECB, “The EU Arrangements for Financial Crisis Management,” ECB Monthly Bulletin, February 2007. One of the first to highlight the size of the potential problem from the onset of the crisis was N. Veron, “Is Europe Ready for a Major Banking Crisis?,” Bruegel Policy Brief (August 9, 2007).

  48. D. K. Tarullo, “Regulating Large Foreign Banking Organizations” (speech, Harvard Law School Symposium on Building the Financial System of the Twenty-first Century: An Agenda for Europe and the United States, March 27, 2014).

  49. A. Milward, European Rescue of the Nation State (London: Routledge, 1992).

  50. L. H. Summers, “Summers Speaks,” Magazine of International Economic Policy (Fall 2007), http://www.international-economy.com/TIE_F07_Summers.pdf.

  51. G. Majone, Europe as the Would-Be World Power (Cambridge: Cambridge University Press, 2009).

  52. M. Bernard, Valéry Giscard d’Estaing: Les ambitions déçues (Paris: Armand-Colin, 2014).

  53. M. O’Neill, The Struggle for the European Constitution: A Past and Future History (Basingstoke, UK: Routledge, 2009).

  54. M. K. Davis Cross, The Politics of Crisis in Europe (Cambridge: Cambridge University Press, 2017).

  55. S. Kornelius, Angela Merkel: The Chancellor and Her World (London: Alma Books, 2014).

  56. For an excellent discussion, see H. Kundnani, The Paradox of German Power (Oxford: Oxford University Press, 2015).

  57. S. Fabbrini, Which European Union? Europe After the Euro Crisis (Cambridge: Cambridge University Press, 2015).

  58. R. Kagan, “Americans Are from Mars, Europeans Are from Venus,” Sunday Times, February 2, 2003, which gave rise to the following book: R. Kagan, Paradise and Power: America and Europe in the New World Order (London: Vintage, 2003).

  59. Habermas and Derrida, “February 15, or What Binds Europeans Together.”

  60. In deep agreement with the basic diagnosis common to P. Anderson, The New Old World (London: Verso, 2009); and P. Baldwin, The Narcissism of Minor Differences: How America and Europe Are Alike (Oxford: Oxford University Press, 2009).

  61. J. Herf, War by Other Means: Soviet Power, West German Resistance, and the Battle of the Euromissiles (New York: Free Press, 1991); and L. Nuti, F. Bozo, M. Rey and B. Rother, eds., The Euromissile Crisis and the End of the Cold War (Washington, DC: Woodrow Wilson Center Press, 2015).

  CHAPTER 5: MULTIPOLAR WORLD

  1. M. E. Sarotte, 1989: The Struggle to Create Post-Cold War Europe (Princeton, NJ: Princeton University Press, 2010).

  2. G. Soros, “Not Without US Aid,” Wall Street Journal, December 7, 1989.

  3. M. G. Gilman, No Precedent, No Plan: Inside Russia’s 1998 Default (Boston: MIT Press, 2010).

  4. P. Blustein, The Ch
astening: Inside the Crisis That Rocked the Global Financial System and Humbled the IMF (New York: PublicAffairs, 2003), 235–277.

  5. J. Johnson, “Forbidden Fruit: Russia’s Uneasy Relationship with the US Dollar,” Review of International Political Economy 15 (2008), 379–398.

  6. P. Ther, Europe Since 1989: A History (Princeton, NJ: Princeton University Press, 2016).

  7. J. M. Goldgeier, Not Whether but When: The US Decision to Enlarge NATO (Washington, DC: Brookings, 1999).

  8. S. F. Szabo, Parting Ways: The Crisis in German-American Relations (Washington, DC: Brookings, 2004).

  9. “Outrage at ‘Old Europe’ Remarks,” BBC News, January 23, 2003.

  10. R. Prodi, “Europe and Peace” (speech, University of Ulster, April 1, 2004).

  11. J. Becker, “Europe’s Other Periphery,” New Left Review 99 (May/June 2016).

  12. R. Martin, Constructing Capitalisms: Transforming Business Systems in Central and Eastern Europe (Oxford: Oxford University Press, 2013).

  13. J. Hardy, Poland’s New Capitalism (London: Pluto Press, 2009).

  14. M. Ferry and I. McMaster, “Cohesion Policy and the Evolution of Regional Policy in Central and Eastern Europe,” Europe-Asia Studies 65 (2013), 1502–1528.

  15. K. Wolczuk, “Integration Without Europeanisation: Ukraine and Its Policy Towards the European Union” (EUI working paper 15, Robert Schuman Centre of Advanced Studies, 2004).

  16. A. Polese, “Ukraine 2004: Informal Networks, Transformation of Social Capital and Coloured Revolutions,” Journal of Communist Studies and Transition Politics 25 (2009), 255–277.

  17. “Doing Business 2006,” World Bank (September 13, 2005), http://www.doingbusiness.org/reports/global-reports/doing-business-2006.

  18. “Classification of Exchange Rate Arrangements and Monetary Policy Frameworks,” IMF, June 30, 2004.

  19. For an outstanding treatment of the Romanian case, see D. Gabor, Central Banking and Financialization: A Romanian Account of How Eastern Europe Became Subprime (Basingstoke, UK: Routledge, 2010).