In The News

End of an Affair? City of London and EU in Bitter Acrimony

Philip Whyte January 12, 2012
One’s history is long and the other’s is short, but the City of London and the European Union have each in their own way been drivers of financial globalization and economic wealth. But the hard-hitting credit crisis, a series of bailouts and global recession have tarnished reputations of governments and financial industries alike, endangering mutual admiration and cooperation: The EU resents...

From Brussels to Durban: Debt and Climate Crises Spotlight Free Riders

Scott Barrett December 9, 2011
Europe’s rapid response to the debt crisis may have overshadowed the long-planned negotiations on climate change in Durban, but the contrast throws light on the problem of global governance, explains economist Scott Barrett. Both crises demonstrate the limits of collective action in the face of known dangers. In Europe, poor fiscal discipline by any euro member threatened other countries, he...

Why Can't Europeans Get Along?

Pankaj Ghemawat December 9, 2011
Forging strong trade connections enriched the European economy, but administrative measures alone did not ensure economic or political integration, cautions management professor Pankaj Ghemawat in an essay for Fortune. While short-term intervention is needed, he argues, Europe must also strive for cultural and political cohesion and build greater trust among 27 nations. He contrasts the EU with...

Why a New York Cheese Buyer Hangs On the Euro's Fate

David Kestenbaum December 7, 2011
Steady currency exchange rates smooth the way for global trade. But the threat of default by Greece, Italy and other European nations has reduced the value of the euro and upset predictability in pricing. Reporting for National Public Radio, David Kestenbaum explains the effect of the euro crisis on a small cheese shop in New York City: “Through his cheese deals, Foster essentially trades in...

Britain Becomes Even More Wary of Unity

Anthony Faiola December 5, 2011
The United Kingdom moved cautiously on EU integration, retaining the pound and rejecting the euro as common currency. By opting out of the euro, Britain maintained the ability to print money and set interest rates. “Yet, as a member of the bloc, Britain has agreed to bind itself to regional regulations, employment laws and legal rulings, in exchange for a stronger voice in European affairs and...

Central Banks' Action Hints At US Fears

Geoffrey T. Smith December 2, 2011
The world’s largest central banks, led by the US Federal Reserve, have united to ease the flow of money and bank loans in the global system. The Wall Street Journal’s Geoffrey Smith compares the defensive measures tried in war, pointing out many analysts worry about what comes next and whether the defenses will hold. Perhaps most notable is the support from the US Federal Reserve. US taxpayers...

America's Other 87 Deficits

Stephen S. Roach November 25, 2011
The US has trade deficits with 88 nations, and in 2010, China’s share was about 40 percent. The trade deficits are a consequence of the country’s own spending behavior – with reduced saving by individuals, business and the government – explains Stephen Roach of Yale University. As master of the world’s reserve currency, “the US borrowed surplus savings from abroad on very attractive terms,...