The European Union’s Response to the 2007-2009 Financial Crisis
"The purpose of this report is to assess the response of the European Union (EU) to the 2007-2009
financial crisis in terms of the financial regulatory changes the EU has made or is planning to
make. The financial crisis began in the United States during the second half of 2006 with a sharp
increase in U.S. bank losses due to subprime mortgage foreclosures. Because the U.S. and EU
banks were using a similar business model, the EU banks experienced similar distressed financial
conditions that U.S. banks faced. Large banks on both sides of the Atlantic found themselves
severely undercapitalized and holding insufficient liquidity. However, because in the European
Union financial regulations are enforced at the European level as well as the member country
level, finding and implementing effective remedies for the causes of the financial crisis have been
slower and different than the United States..."