Jump to ContentJump to Main Navigation
Managing Financial RisksFrom Global to Local$
Users without a subscription are not able to see the full content.

Gordon L. Clark, Adam D. Dixon, and Ashby H. B. Monk

Print publication date: 2009

Print ISBN-13: 9780199557431

Published to Oxford Scholarship Online: September 2009

DOI: 10.1093/acprof:oso/9780199557431.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 20 September 2019

The Changing Political Geography of Financial Crisis Management

The Changing Political Geography of Financial Crisis Management

Chapter:
(p.27) 1 The Changing Political Geography of Financial Crisis Management
Source:
Managing Financial Risks
Author(s):

Louis W. Pauly

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199557431.003.0002

In the wake of several financial crises that also now spanned national boundaries, pragmatic financial supervisors gradually built a workable regime around the principle of ‘home-country control’ — the government ultimately responsible for any particular coordinated response necessary to stabilize an interdependent system was the government of the state within which a troubled institution was licensed and clearly based. A truly integrated pan-European market, however, just as a truly global market, pushes such a regime past its limit. In fact, it is already the case that the emergence of certain large, complex financial institutions in Europe blurs the identity of the responsible government and opens the policy space for new supervisory approaches and common agreement on burden sharing. In principle and in extremis, that space can only be filled with an understanding involving the fundamental commitment of fiscal resources, and by the sharing of such a commitment by national authorities. For various reasons, the extent of that commitment may have to remain implicit, but it will only be plausible if credible structures are in place to coordinate responses in the event of emergency. The difficulty in putting these crisis prevention and crisis management arrangements in place exposes the political dilemma at the heart of the financial integration project, both in Europe and more broadly. Finance respects fewer frontiers, but fiscal politics remains geographically bounded. This chapter sets out the conceptual and historical context for understanding that dilemma, and in this light examines the contemporary evolution of policy responses.

Keywords:   global finance, risk management, Europe, integration, financial crisis, home-country control

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .