Philip Coggan gave an interesting interview this morning to NPR in which he discussed the effect of the of the United States’ bailout failure on the European markets. The primary purpose of the short interview was to describe the European perspective on the global impact of the U.S.’s financial crisis and the speculation on Congress’s activity surrounding it, though one incidental point caught my attention.
Coggan mentions that a concern in Europe at the moment is that a large Swiss bank might fail. This would be quite problematic because, while these types of firms are probably considered "too big to fail" for the European economy, the Swiss government could not afford to bail them out. Europe has a strong interest in the survival and growth of European financial markets–whether they are located within an EU constituent state or not. However, the EU does not have a treasury of its own, so it doesn’t have the power to spend taxpayers’ money on economic bailouts–it doesn’t even really taxpayers in the strictest sense.