Brookings | Wed, Sep 12, 2018
by Douglas A. Rediker
Douglas A. Rediker is a nonresident senior fellow in the Global Economy and Development Program at Brookings. He is also the founding partner of International Capital Strategies, LLC, a Washington, DC-based political economy consultancy founded in 2012 and a member of the board of directors of the Cowen Group.
Ten years after the onset of the global financial crisis, one of its most under-appreciated legacies is the strong U.S. embrace of multilateralism to address growing financial interlinkages around the world. U.S. leadership and engagement at international meetings like the G-20 and at institutions like the IMF proved crucial in crisis response ten years ago. While current “ten years later” pieces are largely focused on the domestic legislative and regulatory response, the crucial role played by U.S. multilateral leadership and engagement should not be forgotten. As the Trump administration considers how to balance its America First doctrine with continued global engagement, it is worth remembering the events of 2008-2009 and its lessons.
As the crisis quickly spread across the globe, it became increasingly clear that any one country’s domestic response, including the U.S., would be insufficient to stop the contagion throughout the financial system. A coherent multilateral approach was required. But it was far from clear that the U.S. would embrace, much less lead, such an approach, or that others would be amenable and willing to follow.