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This chapter lists the key aspects of an effective macroprudential regulatory framework, a list of remaining challenges for creating an effective macroprudential regulatory framework, and an overview of remaining issues in financial regulatory reform more broadly. Remaining challenges include the optimal size and structure of the financial system, a credible mechanism to intervene early on in failing financial intermediaries, disclosure and accounting reforms, a restoration of market discipline at financial intermediaries, including good corporate governance standards in banks, and better macroprudential supervision with complete data for supervisors, substantial better models and real time measures of systemic risk. The chapter also discusses outstanding issues related to the institutional setup and organization of macroprudential policy, including the existing toolkit, the regulatory challenges arising from regulatory arbitrage, the multiplicity of regulatory bodies in the US, the creation of a banking union in the EU, the supervision and resolution of cross-border financial institutions, and some international policy spillovers, including the impact of monetary policy of US and Europe for emerging countries’ asset and credit bubbles through international capital inflows. The chapter concludes that domestic macroprudential policy can be distortionary and that international coordination of macroprudential policies will be essential.

This chapter analyzes monetary policy and systemic risk, and the interrelation with macroprudential policy. It analyzes the role of monetary policy to reduce ex-ante build-up of financial imbalances by leaning against the wind and to combat ex-post credit crunches and fire sales in asset prices. It discusses also the importance of short versus long term interest rates for financial institutions, notably banks. It explains the risk-taking channel of monetary policy, its relation with the credit channel, and summarizes the empirical evidence around the world on these channels. Moreover, the chapter explains that, as monetary policy affects credit and asset prices (thus influencing systemic risk), coordination between monetary and macroprudential policy is key. It also describes how macroprudential policy and its objective of financial stability could be in conflict with the price stability objective of monetary policy.

The Economic Monetary Union (EMU) has been famously portrayed as a ‘metaphor for the European Union’, involving high stakes for the integration process as a whole. Since its origins, the creation of the EMU was an eminently political project, with a direct bearing on the prospects of the European Union (EU) as a polity, its social model, and its constitutional identity. Yet, the main political aspects of the project were mostly discarded in the process that led to the establishment of the EMU’s institutional structure and its substantive rules. The creation of the common currency was not accompanied by the establishment of supranational institutions with a strong political mandate to accommodate conflicting interests, while the exercise of political autonomy at national level has been increasingly seen as a potential danger for the stability of the whole edifice. The crisis and the ensuing reform of the European economic governance consolidated the technocratic character of the EMU architecture and hardened its grip on national political processes.

Chapter 4 addresses the origins of the CIA project to create a Russian political center abroad. The chapter argues that transnational flows of ideas and historical memories were important for a major CIA psychological warfare project. George F. Kennan and other policymakers involved in the project were driven by a romantic attachment to Russian history and the conviction that exiles were potent weapons for psychological warfare against the USSR. Accordingly, plans for the political center—its political complexion and structure—emerged from the interactions of influential Americans and Russian émigrés. The dependence of US psychological-warfare projects on exile politics would prove dysfunctional, as the OPC planners read the state of Russian opinion in the USSR through the distorting lens of exile anti-communism.

This introductory chapter begins by outlining the research questions, the approach, and the research process and material on which it is based. The next three subsections describe a transformation of European welfare states, which is based on the guiding principles of activation and an activating welfare state and on the spread of new governance practices. Both substantive discourse and governance practices are transnational in scope and, in particular, the European Union has taken a leading role promoting this new welfare paradigm through instruments such as the European Employment Strategy. All those trends have consequences for citizenship; for example, they intervene in the gendered institutions and practices of labour markets, welfare provision, and even family life. The final subsection provides an outline of the following chapters.