Across the Pacific, from Asia to the United States, money flowed one way. In the North Atlantic financial system it flowed both ways, both in and out of the United States. This was in the logic of the market-based banking model. Europe’s banks did not have branches spread across the United States. But a Wall Street firm like Lehman didn’t either. This was the beauty of the market-based model of banking. You borrowed the dollars on Wall Street to fund your holdings of mortgages from all over the United States.
