by Adam Tooze
eurozone crisis and, 384, 412–13, 433, 434
fiscal responsibility and, 351–52
G20 Cannes meeting and, 412–13
G20 London summit and, 268, 271
reelection of, 445
on Trump election, 576
Obama administration
budget compromise with Republicans, 390–92
China containment strategy of, 486–89
contingency plans for bond market panic, 284–85
debate bank nationalization, 294–95
eurozone crisis, 2010–12 and, 335–36, 338–39, 344–45, 365, 384–85, 394, 404–5, 412–13, 433–35, 440–41, 523-24
fiscal responsibility and, 350–53
home-owner relief, failure to provide, 281, 321
partisan hostility to, 278
Russian “reset” and, 488
stimulus package, passage of, 277–79, 280–82, 289–90
Obamacare. See Affordable Care Act
Occupy Wall Street, 394–95, 459
oil and commodity price collapse
of 2008, 222–23
of 2014, 503–4, 601
OMT. See Outright Monetary Transactions (OMT)
1Malaysia Development Bank (1MDB), 259–60
O’Neill, Paul, 36
opioid epidemic, deaths from, 457
Orban, Viktor, 492
originate-to-distribute mortgage lending system, 48
Orszag, Peter, 25, 26, 29, 30, 35, 200, 284, 290, 352, 461, 464
Osborne, George, 348–49, 350, 405, 550
Outright Monetary Transactions (OMT), 441, 442
Pàf, 535–36
Palin, Sarah, 3, 175, 368
Panasonic, 159
Pandit, Vikram, 197, 198
Papademos, Lucas, 410, 425
Papandreou, George, 325, 409–10
Papoulias, Karolos, 340, 409
PASOK, 323–24, 330, 357, 376, 409, 428, 435, 516
passporting agreements, 548–49, 558
Paul, Ron, 217
Paulson, Hank, 41, 137, 138, 162, 573, 609
Fannie Mae/Freddie Mac bailout and, 172–73
Lehman collapse and, 176, 177
TARP and, 180–81, 183, 195, 196, 197
Paulson, John, 379
PDCF. See Primary Dealer Credit Facility (PDCF)
Pelosi, Nancy, 467, 582
Pence, Mike, 578
People’s Bank of China, 34, 242, 249, 543
People’s Party, 538
Peterson, Peter G., 35, 464
Pfandbrief model, 103
Philippines, 483
Piketty, Thomas, 455, 462
PIMCO, 209
Podemos, 376, 514, 535
Poland, 121, 123, 126, 227, 232, 491, 538–39
populism, 20, 39
populist protectionism, 39
Poroshenko, Petro, 501, 508
Portugal
debt crisis in, 322, 326
deficits in, 101
elections, October 2015, 535–37
S&P downgrades sovereign debt of, 421
unemployment in, 535
Posen, Adam, 555–56
Powell, Dina, 579
Powell, Jay, 591
pre-provision net revenue (PPNR), 310
Primakov, Yevgeny, 128
Primary Dealer Credit Facility (PDCF), 208–9
Prince, Chuck, 71
private sector involvement (PSI), 322
in Greece, 384–85, 388–89, 423–28
Merkel-Sarkozy Deauville agenda and, 361–62
in Ukraine, 508
Prodi, Romano, 94, 122
protectionism, 39, 596–97
PSI. See private sector involvement (PSI)
Putin, Vladimir, 118, 131, 136, 488–89
elected president, 2000, 128
elected president, 2012, 489
financial crisis of 2008 and, 223–24, 225, 226
Munich Security Conference speech of, 132–33
NATO membership for Georgia and Ukraine opposed by, 136, 138–39
quantitative easing (QE)
decision not to taper, interpretations of, 480–82
emerging market debt purchases and, 473–75
by European Central Bank, 519–20, 534–35
QE1, 209–10, 285–86
QE2, 367–71
QE3, 441–42, 471, 475, 503
stock market recovery and, 472–73
taper tantrum and, 475–80
Raiffeisen Bank, 124, 234
Rajan, Raghuram, 67, 477, 479
Rajoy, Mariano, 431, 434, 436, 535
Ranieri, Lewis, 48–49
rating agencies. See credit-rating agencies
RBS, 110, 154, 189, 190, 191, 193, 198, 208, 209, 292, 541
real estate boom
in eurozone countries, 105–9
in US (See housing market, US)
Recovery and Reinvestment Act, 584
redlining, 47
Regling, Klaus, 439
Reich, Robert, 460, 462, 468
Reinhart, Carmen, 347, 452
Renzi, Matteo, 518, 562
repo (repurchase agreements)
ECB repo model, 99–100
run on, 146–50
US mortgage market and, 61–62, 69
Republican Party, 28, 36, 201, 613, 614
budget compromise with Obama administration, 390–92
budget negotiations of 2013 and 2014, 465, 466, 467, 468
election of 2016 and, 568–69, 571–73
Fannie Mae/Freddie Mac bailout and, 172, 173, 174–75
fiscal policy of, 27–29, 36–37, 353, 582–84
midterm election (2010) results, 352
stimulus package and, 278
TARP and, 182–83, 184, 195
Tea Party movement and, 278, 304, 352, 391, 464, 465, 469–70
Reserve Primary Fund, 152–53
reverse repo, 82
Rice, Condaleeza, 136–37
Rogoff, Kenneth, 347, 452
Romania, 121, 126, 135, 227, 229
Romer, Christina, 201, 280–81, 289, 294
Romney, Mitt, 463, 566
Rosneft, 129, 223, 504, 505
Roubini, Nouriel, 35
Rubin, Robert, 25, 26, 29, 30, 32, 35, 53, 54, 68, 200
Rumsfeld, Donald, 122
Rusal, 223, 224
Russia, 118–20, 128–35, 611–12
anti-dollar campaign of, 131–32
Asian financial crisis and, 119–20
central bank’s support of ruble, 224
China strategy of, 509
cold war and, 118, 119
emerging market crisis in, 1998, 7, 32
energy industry and economic recovery in, 128–30
Eurogroup-Syriza debt restructuring confrontation and, 524
Fannie Mae and Freddie Mac bonds sold by, 137–38
financial crisis of 2008 and, 8, 9, 220–27
fiscal stimulus in, 225–26
Georgian War, 4, 117, 138
Nord Stream pipeline deal with Germany, 131
oil and commodity price plunge of 2008, impact of, 222–23
oil price plunge of 2014, impact of, 503–4
oligarchs, rescue of and “bail in” by, 223–26
US election of 2016, meddling in, 567–68
See also Putin, Vladimir; Ukraine crisis
Ryan, Paul, 182–83
S. G. Warburg, 83
Saakashvili, Mikhail, 125
Sachsen LB, 144
Saez, Emmanuel, 455
Salomon Brothers, 48–49, 52
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Samaras, Antonis, 425, 435, 516
Samsung Electronics, 256–57, 260
Sandbu, Martin, 102, 364
Sanders, Bernie, 566–67, 576, 608
Sanio, Jochen, 188
Santander, 184
Sapin, Michael, 531
Sarkozy, Nicolas, 2–3, 72, 138, 139–40, 218, 219, 221, 264, 423
bank bailouts and, 186, 187, 193
Deauville announcement and, 361–62
election defeat of 2012, 429
financial crisis of 2008 and, 2–3, 73, 186–87, 193
G20 Cannes meeting and, 409–10, 412, 413
G20 London summit and, 268–69, 271
Greek debt crisis and, 325–26, 333, 342
Merkel-Sarkozy ECB plan, 387–89
Papandreou replaced as prime minister and, 409–10
Saudi Arabia, 160, 503
Saudi Arabian Monetary Authority, 35
savings and loan crisis, 44–45
savings glut, 38
Sberbank, 503, 505
Schäuble, Wolfgang, 113, 329, 332, 333, 354, 369, 377, 425, 437, 512, 522, 530–31, 592, 595–96
Schlaes, Amity, 368
Schmidt, Helmut, 44
Schroeder, Gerhard, 94–95
Schularick, Moritz, 35
Schulz, Martin, 496
Schumer, Charles, 82, 88, 470, 582
Schwartz, Anna, 38–39
SDRs. See Special Drawing Rights (SDRs)
Sechin, Igor, 225, 499
secular stagnation thesis, 451–52, 453–54
Securities Market Programme (SMP), 399
securitization
in Europe, 103
US mortgages and, 48–51, 55–56
sequester cuts, 464, 465–66
Serbia, 232
Setser, Brad, 35, 172, 609
shadow banking, 69
Sheets, Nathan, 220, 229
Shevardnadze, Eduard, 125
Shin, Hyun Song, 9
Sibneft, 129
Sichuan earthquake, 244
SIFI. See systemically important financial institutions (SIFI)
Sikorski, Radek, 415–16, 491
Silva, Cavaco, 536–37
Simpson, Alan, 583
Simpson-Bowles Commission, 352, 353
Singapore, 35, 255
single tranche open market operations (ST OMO), 208
Sinn, Hans-Werner, 380, 381
SIV-ABCP model, 60–61
Škoda, 123
Slaughter, Anne-Marie, 460
Slovakia, 121, 227
Slovenia, 121, 227
SMP. See Securities Market Programme (SMP)
Snowden, Edward, 484
Sobinbank, 224
Socialists (France), 429, 435
Socialists (Portugal), 536
Socialists (Spain), 535
Société de Financement de l’Économie Français (SFEF), 194
Société de Prise de Participation de l’État (SPPE), 194
Société Générale, 152, 194
Sócrates, José, 342, 374
Sonderfonds Finanzmarktstabilisierung, 194–95
Sony, 158
Soros, George, 119
South Africa, 477, 601
South Korea
Asian financial crisis of 1997 and, 7, 32, 255–56
capital controls adopted by, 475
financial crisis of 2008 and, 8, 9, 256–57, 260–61
financial sector rescue, 260–61
foreign reserves of, 256
won depreciation, 257
won-dollar carry trade in, 256–57
sovereign wealth funds (SWF), 34–35
Spain
bank bailouts in, 193
caja crisis, 431
debt crisis in, 322, 326, 430–37
demonstrations in, 374–76
ECB’s bond buying program, 2011, 398–99
general elections, December 2015, 535
household wealth lost in, 156
housing bubble bust, 2012, 430–32
Moody’s downgrade of, 433
real estate boom in, 105–6, 107–9
unemployment in, 374, 431
SPD, 97, 287, 329, 377, 429, 430, 435
Special Drawing Rights (SDRs), 266
special purpose vehicles (SPVs), 85
Der Spiegel, 40, 263, 381, 468
SPVs. See special purpose vehicles (SPVs)
Stability and Growth Pact, 93, 101, 355
Standard & Poors, 49, 64, 385, 392–93, 421, 536
Stark, Jürgen, 400
Stark, Pete, 182
State Administration of Foreign Exchange, 35
State Owned Enterprises (SOE), 248
Steinbrück, Peer, 72, 96–97, 185, 187, 189, 195, 218, 219, 233, 287, 288, 328, 329
Stiglitz, Joseph, 267, 523
stimulus
American Recovery and Reinvestment Act (See stimulus package, US)
automatic stabilizers and, 283–86
comparison of, 273–75
failure to sustain, 291
in China, 243–51
in Germany, 287
Republican tax plan of 2017, 584–85
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, 352–53
stimulus package, US, 276–83
home-owner relief, failure to provide, 281
politics involved in passage of, 277–79, 280–82, 584
scope of, 279
success of, 279–80
Store, Jonas Gahr, 263
Stournaras, Yannis, 519
Strauss-Kahn, Dominique, 270, 343, 344, 382, 383
stress tests
of European banks, 315, 357–58, 406
of US banks, 298–301, 309–10
structured investment vehicles (SIVs), 60–61, 68–69
Stubb, Alex, 561
subprime mortgages, 47–48, 56
adjustable rate mortgages, 70
amount issued by 2007, 66
on bank balance sheets, 59–60
“big short” positions and, 70–71
default rates, 70
expansion of, in final boom in, 63–64
funding mechanisms for, 60–62
rating agencies and, 56, 64
worse quality loans, profit spread on, 64
Süddeutsche Zeitung, 315
Summers, Larry, 32, 35, 41, 54, 67, 68, 111–12, 200, 261, 280–81, 284–85, 294, 304–5, 352, 405, 446
secular stagnation thesis of, 451–52, 453–54
Sviaz Bank, 224
Swagel, Phillip, 198
swaps. See credit default swaps (CDS); liquidity swap lines
Swedbank, 234
Sweden, 105
Swiss National Bank, 212, 213, 215
syndicated loans, 153–54
Syriza, 376, 428–29, 435, 514, 516–17
systemically important financial institutions (SIFI), 13
global (G-SIFI), 311–13
in US, 303–4
TAF. See Term Auction Facility (TAF)
Tajikistan, 506
taper tantrum, 475–80
TARGET2 balances, 379–81
TARP (Troubled Assets Relief Program), 177, 179–84
attractive terms of, 198–99
Capital Purchase Program facility, 196–97
criticisms of, 199
defeated in House, 184
passage of, 195
political issues, 181–84
stock market response to defeat of, 184
Treasury’s initial proposal for, 180–81
tax cuts
of 2017, 582–85
of Bush Administration, 27–28
in Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, 352–53
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, 352–53
Taylor, John B., 591
Taylor rule, 589–90
Tea Party movement, 278, 304, 352, 391, 464, 465, 469–70
Term Asset-Backed Loan Facility, 209
Term Auction Facility (TAF), 207–8
Term Securities Lending Facility, 208
Thailand
Asian financial crisis and, 7, 32, 255–56
capital controls adopted by, 475
financial crisis of 2008 and, 257, 258
stimulus program, 258
Thain, John, 183
Thatcher, Margaret, 80
Thiel, Peter, 461–62
#Thisisacoup, 533
This Time Is Different: Eight Centuries of Financial Folly (Reinhart & Rogoff), 347
Thomsen, Poul, 523
TNK-BP, 223
Topolánek, Mirek, 276
To Potami, 516
Tories, 348–49, 540, 543–44, 545, 547, 560
Toshiba, 159
Toyota, 158
trade unions, 44
transatlantic financial system, 72–90
Basel I accord, 85, 311
Basel II accord, 85–87, 311
Basel III accord, 311–14
Chinese and European investment in US mortgage-backed securities, 73–75
City of London, role of, 80–84
financial flows between US and European banks, 75–79
financial risk in, 88–90
Transatlantic Trade and Investment Partnership (TTIP), 18, 591–92, 593
Transneft, 505
Trans-Pacific Partnership (TPP), 18, 486, 591–92, 593
Treasury Department, US See US Treasury
Treasury securities. See US Treasury market
Tremonti, Giulio, 72–73, 192, 389
Trenin, Dmitri, 134
Trichet, Jean-Claude, 98–99, 144, 187, 192, 286, 356, 460
Greek debt crisis and, 334, 338, 340, 341, 343, 387, 388
Merkel-Sarkozy Deauville announcement and, 361–62
Securities Market Programme (SMP) and, 399
triparty repo market, 61–62, 149, 150
Trump, Donald, 21, 608
background of, 569–71
on Brexit, 563
cabinet of, 579
campaign of, 573–74, 576–77
campaign speeches of, 564–65
Dodd-Frank Act and, 587–88
economic nationalism agenda of, 578
election of, 565–66, 576–77
European trips of, 594, 595
foreign policy of, 591–97
inauguration speech of, 4
power politics of, 579–80
stock market response to, 578–79