Taking Europe seriously: European financialization and US monetary power

Iain Hardie and Helen Thompson

Review of International Political Economy, 2021, vol. 28, issue 4, 775-793

Abstract: This article considers the link between the financialization of European banks and US monetary power. We focus first on the Global Financial Crisis of 2008-09 (GFC), arguing that crisis origins should largely be located in European banks’ financialization and their becoming a banker to both the US and the global US dollar-based offshore banking system. The interdependence between this system and the US economy constrained US monetary policy before the crisis, and forced the Federal Reserve to assume the Lender of Last Resort (LOLR) function for the entire offshore system, despite much of this system involving lending between non-US counterparties. European financialization caused reduced US monetary autonomy and therefore power. This article argues for greater attention in IPE to European financial developments in the GFC’s implications. The importance of European banking has been maintained post-crisis and Europe has moved to a substantial surplus position, suggesting Europe’s continued importance.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1080/09692290.2020.1769703 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rripxx:v:28:y:2021:i:4:p:775-793

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rrip20

DOI: 10.1080/09692290.2020.1769703

Access Statistics for this article

Review of International Political Economy is currently edited by Gregory Chin, Juliet Johnson, Daniel Mügge, Kevin Gallagher, Ilene Grabel and Cornelia Woll

More articles in Review of International Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().