Power of Inaction

Cornelia Woll

Description

Bank bailouts in the aftermath of the collapse of Lehman Brothers and the onset of the Great Recession brought into sharp relief the power that the global financial sector holds over national politics, and provoked widespread public outrage. In The Power of Inaction, Cornelia Woll details the varying relationships between financial institutions and national governments by comparing national bank rescue schemes in the United States and Europe. Woll starts with a broad overview of bank bailouts in more than twenty countries. Using extensive interviews conducted with bankers, lawmakers, and other key players, she then examines three pairs of countries where similar outcomes might be expected: the United States and United Kingdom, France and Germany, Ireland and Denmark. She finds, however, substantial variation within these pairs. In some cases the financial sector is intimately involved in the design of bailout packages; elsewhere it chooses to remain at arm's length. Such differences are often ascribed to one of two conditions: either the state is strong and can impose terms, or the state is weak and corrupted by industry lobbying. Woll presents a third option, where the inaction of the financial sector critically shapes the design of bailout packages in favor of the industry. She demonstrates that financial institutions were most powerful in those settings where they could avoid a joint response and force national policymakers to deal with banks on a piecemeal basis. The power to remain collectively inactive, she argues, has had important consequences for bailout arrangements and ultimately affected how the public and private sectors have shared the cost burden of these massive policy decisions.

Sujets

• Banking
• Bank
• Comparative politics
• Political economy

Informations

• Publié par: Cornell University Press
• Date de parution: 17 avril 2014
• Nombre de lectures: 0
• EAN13: 9780801471155
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

The Power of Inaction

A volume în the serîes

CornellStudiesinPoliticalEconomy edîtedbyPeterJ.Katzensteîn

Alîstotîtlesînthîsserîesîsavaîlableatwww.cornellpress.cornell.edu.

The Power of Inaction BankBailoutsinComparison

CorneliaWoll

CornellUnîversîtyPress Ithaca and London

Copyrîght © 2014 by Cornell Unîversîty

Allrîghtsreserved.Exceptorbrîequotatîonsînarevîew,thîs book, or parts thereo, must not be reproduced în any orm wîthout permîssîon în wrîtîng rom the publîsher. or înormatîon, address Cornell Unîversîty Press, Sage House, 512 East State Street, Ithaca, New York 14850.

îrst publîshed 2014 by Cornell Unîversîty Press Prînted în the Unîted States o Amerîca

LîbraryoCongressCatalogîng-în-PublîcatîonData Woll, Cornelîa, author.  The power o înactîon: bank baîlouts în comparîson / Cornelîa Woll.  pages cm. — (Cornell studîes în polîtîcal economy)  Includes bîblîographîcal reerences and îndex.  ISBN 978-0-8014-5235-2 (cloth: alk. paper)  1. Bank aîlures—Government polîcy. 2. Baîlouts (Government polîcy) I. Tîtle.  HG1725.W654 2014  332.1—dc23 2013042835

CornellUnîversîtyPressstrîvestouseenvîronmentallyresponsîble supplîers and materîals to the ullest extent possîble în the publîshîng o îts books. Such materîals înclude vegetable-based, low-VOC înks and acîd-ree papers that are recycled, totally chlorîne-ree, or partly composed o nonwood fibers. or urther înormatîon, vîsît our websîte at www.cornellpress.cornell.edu.

Cloth prîntîng

10 9 8 7 6 5 4 3 2 1

To my amîly

LîstoFîguresandTables LîstoAbbrevîatîons

1. Bailout Games

Contents

2. Crisis Management across the World

3. The Power of Collective Inaction

4. From Theory to Practice

5. The United States and the United Kingdom

6. France and Germany

7. Ireland and Denmark

8. Lessons Learned

Acknowledgments Appendîx:LîstoIntervîews Bîblîography Index

îx xî

1

1

4

6

6

4

5

8

2

112

139

165

177 181 183 201

FiguresandTables

Figures 1.1 Stock market actîvîty versus bank credît 2.1 Real house prîces, 2003–9 2.2 Commîtted and actual expendîtures, 2007–10 2.3 Total expendîtures 2008–10, (în € bîllîon) 2.4 Instruments used as percentage o actual expendîtures 5.1 DIC resolutîon o banks

Tables 2.1 Net costs 2008–11 2.2 (Un)attractîveness o government support or partîcîpatîng înstîtutîons 2.3 Instîtutîonal setup o natîonal schemes 2.4 Comparîson summary 3.1 Experîence o crîsîs management în 2008–9 3.2 Power relatîonshîp and actîons by country 4.1 Approaches to bank accountabîlîty 8.1 The role o central banks 8.2 Overvîew o bank accountabîlîty

9 19 32 33 36 95

35

38 41 43 60 61 80 168 173