Chapter 7 Regulating risk
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This chapter examines the supervisory mechanisms which sustained US risk power in the period leading up to the 2008 crisis. It argues that US financial regulators played a key role managing the IBM throughout the post-WWII period, and did so in a way that strengthened the dollar basis of global debt markets. This involved supporting too-big-too-fail firms and dollar liquidity in European markets, building a supervisory network to stabilize the transatlantic financial system, dismantling barriers to foreign demand, and supporting the development of market-based financial practices that were themselves a constitutive part of the post-Bretton Woods financial order. The chapter also shows that financial crises have been instrumental for the expansion of US risk power and a key aspect of its development: in one way or another they have been utilized to further the internationalization of US dollar denominated bonds, drawing countries deeper into the hub and spoke financial system created after the Second World War.

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