Americas: Lost in translation

Author: | Published: 25 Jan 2016
Transatlantic dialogue on financial services?

How open is Europe to American capital?

At first glance, it's an odd question. The EU's flagship economic policy, the Capital Markets Union (CMU), stresses its international openness. In November European Commissioner Lord Jonathan Hill was explicit: "We want a Europe that is open for business and open to investment." Despite the 2008 financial apocalypse originating in the US, the EU, on principle, welcomes the country's capital. The broad brush of post-war transatlantic financial history wouldn't have it any other way.

It's the second glance that's troublesome.

In the crisis, financial contagion first flowed from the US to Europe. American mortgage-backed securitisations caused a rot, while EU-originated securitisations generally performed quite well. A key part...