shades of richard duncan
-- via brad setser
, the work of florence pisani and anton brender, "globalized finance and its collapse
They recognize that the current crisis could not have happened in the absence of an accumulation of credit risk by private financial intermediaries (big banks, broker-dealers and the “vehicles” that operated in the shadows) in the US and Europe. But they also recognize that the accumulation of credit risk by private financial intermediaries would not have been possible if emerging market governments hadn’t been so willing to accumulate exchange rate risk.
They consequently highlight the impossibility of assigning blame for the current crisis solely to the financial sector (and their regulators) in the west or the central banks of the east. Both ultimately were responsible, just in slightly different ways.
Labels: economics, markets