Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Significantly, they pointed out that “[t]he Fed’s purchase program has also met broad opposition from other central banks” across the world. This was no exaggeration. After eighteen months of wrangling at the G20 over fiscal policy, QE2 produced an open rift over monetary policy. This was predictable, but it was not necessary. The two agenda-setting innovations of October and November of 2010—the Merkozy PSI agenda of Deauville and Bernanke’s QE2—could have been complementary. As Chopra of the IMF had laid out, the ideal accompaniment for aggressive debt restructuring in Ireland would have been an ECB bond-purchasing program designed to insulate the other fragile members of the eurozone from the fallout. The push for PSI and bond market intervention were both responses to the inadequacy of the course embarked upon in Greece in May 2010. But in the eurozone the two never joined hands. Instead, rather than seeing QE as the necessary accompaniment to a more sustainable resolution of the eurozone debt crisis, Berlin’s conservatives led the international front against monetary experiments.