Kirjahaku

A penetrating critique tracing how under-regulated trading between European and U.S. banks led to the 2008 financial crisis—with a prescription for preventing another meltdown There have been numerous books examining the 2008 financial crisis from either a U.S. or European perspective. Tamim Bayoumi is the first to explain how the Euro crisis and U.S. housing crash were, in fact, parasitically intertwined. Starting in the 1980s, Bayoumi outlines the cumulative policy errors that undermined the stability of both the European and U.S. financial sectors, highlighting the catalytic role played by European mega banks that exploited lax regulation to expand into the U.S. market and financed unsustainable bubbles on both continents. U.S. banks increasingly sold sub-par loans to under-regulated European and U.S. shadow banks and, when the bubbles burst, the losses whipsawed back to the core of the European banking system. A much-needed, fresh look at the origins of the crisis, Bayoumi’s analysis concludes that policy makers are ignorant of what still needs to be done both to complete the cleanup and to prevent future crises.

This timely book provides an overview of recent work on international capital mobility and optimum currency areas, exploring how increasing financial integration affects saving, investment, and consumption across countries, and how the choice of monetary regime is affected by a country's circumstances. At a time of unprecedented change in the international financial system, it provides a holistic view of the interaction between financial integration and macroeconomic activity. The first part of the book critically reviews and extends the existing debate on how easily capital flows between countries. The second half surveys and expands the theoretical and empirical evidence on choosing between having a single currency or multiple moneys. These two aspects of the international economy are integrated into one readily accessible volume, which is comprehensive enough to be useful to specialists in international finance and sufficiently approachable to appeal to other academics, students, and policy makers. As trade deals like NAFTA and EMU seek higher levels of economic integration, this book will become essential reading. Tamim Bayoumi is an economist with the International Monetary Fund. This title was formally part of the Studies in International Trade Policy Series, now called Studies in International Economics.