The Dollar as a Mutual Problem: New Transatlantic Interdependence in Finance

Abstract: When the 2007 global financial crisis hit financial markets, European leaders were quick to point the finger at US markets, excessive risk-taking, and insufficient regulation. However, it soon became apparent that European banks were more exposed than their Wall Street counterparts. With massive dollar liabilities, European banks were dependent on the US to act as a global lender of last resort. The crisis revealed a level of transatlantic interdependence that had been unknown to most observers and policymakers prior to the crisis. We argue that this represents a paradox, given that the project of the European Monetary Union was partly motivated by a desire to make Europe more independent from the US dollar. The euro was a response to the challenge of "it’s our dollar, but it's your problem". In this article, we examine how the European vulnerability to the US dollar that began post-Bretton Woods did not, in fact, disappear with the creation of a European currency. Instead, through

Object Details

• Location: Deutsche Nationalbibliothek Frankfurt am Main
• Extent: Online-Ressource
• Language: Englisch
• Notes: Veröffentlichungsversion ; begutachtet (peer reviewed) ; In: Politics and Governance ; 10 (2022) 2 ; 198-207

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Veröffentlichung
• (where): Mannheim
• (who): SSOAR, GESIS – Leibniz-Institut für Sozialwissenschaften e.V.
• (when): 2022
• Creator: Hjertaker, Ingrid ; Tranøy, Bent Sofus

Further information

• DOI: 10.17645/pag.v10i2.5028
• URN: urn:nbn:de:101:1-2023072609342145395892
• Rights: Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
• Last update: 25.03.2025, 1:53 PM CET