April 10, 2007

Via Kranenburg, interesting Financial Times article floating a different theory of the capital markets competitiveness crisis: during the late 1990s various U.S. domestic factions demanded that capital markets be closed to Chinese and Russian capital issuers, on geopolitical or human-rights grounds. The result? Fear of future sanctions, or other forms of "political risk", now keeps issuers from those countries and elsewhere distrustful of U.S. capital markets. So at least argues Benn Steil of the Council on Foreign Relations, who stated his case at greater length in a 2005 paper. P.S. Great minds think alike etc.: another version ran in the Apr. 5 New York Sun.