Countries around the world appear to hold the United States responsible for the subprime crisis, as they rightfully should. In the United States many people hold the federal government responsible for lack of regulatory enforcement. Tracking the issue back even further, state regulations were set aside in favor of federal-level regulations established by the Office of the Comptroller of the Currency. In reality the OCC did little or nothing.
European nations, notably France, appear upset by what they see as a lack of sufficient trans-Atlantic coordination on the policy response to the credit crunch sparked by a wave of defaults on US subprime, or risky, mortgages. Europe will press the United States to show “more cooperation” in dealing with the global financial crisis, France’s European minister said this week.
Money reported this week that “Washington’s calls for other major economies to boost domestic demand seem set to fall on deaf ears as Japan and European nations are loath to worsen their public finances to tackle what they see as largely a US-made crisis.” (credits) Accordingly, Washington asked states to help by creating tax free bonds. This comes after Washington slapped the states in the face in favor of the OCC.
Will Washington finally be held accountable in the United States and around the world? Europe will press the United States to show more cooperation, but there is little cooperation within the United States with regard to regulatory authority. A total overhaul is in order. After all, the OCC gets most of its funding from banks they claim to regulate. In reality is is blood money paid to overlook problems until they spiraled out of control all over the world. Trans-Atlantic coordination requires some organizational skills in the United States, not a cover-up.