Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
- Fault Is Shared in Misjudging of ISIS Threat (Peter Baker and Eric Schmitt, The New York Times) Barack Obama has had his George W. Bush moment. Just as the "W" administration was unaware of the imminent 9/11 attack, the Obama White House was taken by surprise by the rise of the Islamic State. It can be debated whether total ignorance (Bush) or total misjudgement (Obama) is worse. Econintersect would suggest that it little matters which - the end result is the same, a blindside. See following articles.
by Claudia M. Buch, James Chapman, and Linda Goldberg - Liberty Street Economics, Federal Reserve Bank of New York
Over the past thirty years, the typical large bank has become a global entity with subsidiaries in many countries. In parallel, financial liberalization has increased the interconnectedness of banking systems, with domestic banking systems becoming more exposed to shocks transmitted through foreign banks. This globalization of banking propagated liquidity risk during the global financial crisis and subsequent euro area crisis. Unfortunately, little is known about how cross-border operations of global banks transmit liquidity shocks between countries.