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The massive financial instability of 2007–08 was, in the main, the result of lax monetary policy. Regulation compounded this error by allowing and encouraging excessive leverage and maturity transformation by banks. Innovation did contribute to reckless credit expansion and investments, but without lax money and excessive leverage, reckless bets on asset price increases would not have been possible. Therefore, a repeat of this instability could be avoided by correcting these two policy faults. There is no need for intrusive rules constraining non-bank intermediaries and financial innovation. The main message is: keep it simple. [ABSTRACT FROM AUTHOR]

Transatlantic co-operation and conflict over air passenger information, financial transactions records and maritime container security illustrate the European Union's reaction to the transboundary assertion of US counter-terrorism regulation in the wake of the terrorist attacks of September 11. A close examination of the cases suggests that the EU- US agreements on the transfer and use of PNR and SWIFT data were made to safeguard the integrity of the EU data protection regime and more importantly the European norm of data privacy from the undermining effects that might arise from the extraterritorial exercise of authority by the United States. [ABSTRACT FROM AUTHOR]

After nearly a century of dominance of the international monetary system, has the US dollar finally met its match in the euro? When Europe's economic and monetary union (EMU) came into existence in 1999, many observers predicted that the euro would soon join America's greenback at the peak of global finance. Achievements, however, have fallen short of aspiration. After an initial spurt of enthusiasm, international use of the euro actually appears now to be levelling off, even stalling, and so far seems confined largely to a limited range of market sectors and regions. The euro has successfully attained a place second only to the greenback – but it remains, and is likely to remain, a quite distant second without a determined effort by EMU authorities to promote their money's global role. The temptation will surely be great. In practical terms, it is difficult to imagine that EMU authorities will refrain entirely from trying to promote a greater role for the euro. But that, in turn, could turn out to be a recipe for discord with the United States, which has never made any secret of its commitment to preserving the greenback's worldwide dominance. A struggle for monetary leadership could become a source of sustained tensions in US–European relations. Fortunately, however, there seems relatively little risk of a destabilizing escalation into outright geopolitical conflict. [ABSTRACT FROM AUTHOR]

In this article we investigate the determinants of US outward Foreign Direct Investment (FDI) in the European Union for the period 1982–2002. The data set allowed us to discern differences in the pattern of US FDI between EU core and EU periphery countries, as well as over different time periods during the last two decades. The results indicate that the US FDI pattern varies among different groups of countries and that there was a restructuring in multinational firms' investment activity after the implementation of the single market plan. Agglomeration factors, market size, qualified and productive labour and cost efficiency of local production seem to dominate in the location choice of US investors. [ABSTRACT FROM AUTHOR]

The belief that the European Central Bank (ECB) follows the US Federal Reserve (the Fed) in setting its policy is so entrenched with market participants and commentators that the search for empirical support would seem to be a trivial task. However, this is not the case. We find that the ECB is indeed often influenced by the Fed, but the reverse is true at least as often if one considers longer sample periods. There is empirically little support for the proposition that there has for a long time been a systematic asymmetric leader-follower relationship between the ECB and the Fed. Only after September 2001 is there more evidence of such an asymmetry. There is a clear-cut structural break between the period pre-economic and monetary union (EMU) and EMU itself in terms of the relationship between short-term interest rates on both sides of the Atlantic. [ABSTRACT FROM AUTHOR]

Policy-makers and scholars continue to express concerns that the EU suffers from a ‘democratic deficit’. But most democratic deficit arguments are not based on recent empirical research; and seeing the EU as sui generis , they fail to compare the EU to other polities. This article compares the European ‘regulatory state’ with two federal democracies, the United States and Switzerland, in recent merger regulation. Its main finding is that European merger regulation is less democratic than American, but more democratic than Swiss regulation. If the EU suffers from a democratic deficit, it is hardly alone. [ABSTRACT FROM AUTHOR]

The concept of sovereignty can help us understand contemporary policy disagreements between Europe and the United States. Ironically, the US, from which the first republican critique of the concept of sovereignty emanated, has now become one of its staunchest defenders. Meanwhile, the European Union has moved away from the classical conception of external sovereignty. The success of the European Union could enable it to serve as a model for more troubled regions, for which insistence on classical sovereignty is a source of conflict. More ominously, transatlantic differences over sovereignty could increase tension and conflict between democracies, thus undermining world order in the long run. [ABSTRACT FROM AUTHOR]