The Relevance of U.S. Experience for Europe’s Capital Markets Union

This is a talk I gave on 21 June at the European Political Strategy Center, which is the in-house think tank of the European Commission.  The audience was very generous in listening to my presentation.  The point I tried to make is that the capital markets union is an important project, but we should be careful to ensure that policymakers supplement the efforts to make capital markets more efficient with efforts to make them more resilient.  This is an argument that I have made before and yet it is probably worth repeating.  Given the dynamics behind Europe’s economic and financial crisis, there is simply too much at stake.


Thank you for giving me the opportunity to share some thoughts about the relevance of U.S. experience for Europe’s capital markets union. My argument is that U.S. experience is relevant both in terms of its successes and in terms of its mistakes. The most important lesson I draw from the United States is about the importance of managing or channeling the flight to quality when financial markets come under duress. In jargon, my specific concern is when a sudden increase in liquidity preference translates into a spontaneous return of home bias. In plainer language, what interests me is how we handle situations where investors decide to place priority on protecting the value of their assets.

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U.S. Presidential Elections – Known and Unknown

The U.S. Presidential elections represent a stark choice between a competent if unexciting continuation of the status quo and an emotional – perhaps even terrifying – break with the past. Moreover, the results of the contest will be felt far beyond the borders of the United States. On 17 and 18 March, I was invited by the United States consulate in Milan to participate in a series of events to explain the ongoing elections. The audiences were mostly Italian but there were some others mixed into the groups as well. My goal was give some sense of how the U.S. elections are going to have an impact on the outside world. That impact will be both direct and indirect. The direct effects will come through the change in U.S. foreign policy. The indirect effects will come through the change in economic policy. I outlined the two issues in turn. Then I offered some thoughts on the future of U.S. global leadership. The bottom line in all three cases is very similar: Americans must choose between the familiar and the unknown – and the world must accept the consequences.

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Political Risk

In August 2016, SAIS Europe will inaugurate a new Master of Arts degree program in political risk analysis – called the ‘Masters of Arts in Global Risk’. It is a thirteen-month program taught in Bologna, Italy that includes a three-month practicum as a final project. The goal of the program is to help students to develop the analytic skills in economics, political science, history, law, and international relations necessary to work with clients to understand the world around us. It is a practical application of the social sciences. And it is a great potential source of added value for our students. This degree is currently accepting applications.  The deadline for applications is 7 January 2016.

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Banking Union and Democratic Legitimacy

The European University Institute hosted a symposium on Europe’s banking union last Friday, 22 May. The organizing theme was the interaction between ‘banking union’ as a form of integration and ‘democratic legitimacy’. My contribution was to try and frame that question within the larger context of European financial market integration. What follows is the formal presentation.

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