IDEAS home Printed from https://ideas.repec.org/a/bpj/buspol/v17y2015i3p473-493n2.html
   My bibliography  Save this article

The long arm of justice: U.S. structural power and international banking

Author

Listed:
  • Emmenegger Patrick

    (Department of Political Science, University of St. Gallen, Rosenbergstrasse 51, 9000 St. Gallen, Switzerland)

Abstract

How much authority can sovereign states exercise over international banking in times of financial globalization? While most literature on international finance is rather pessimistic, this article argues that in case of US law enforcement, this pessimistic view is increasingly erroneous. The reason is that US authorities can take advantage of international banks’ structural dependence on access to the dollar-based financial system to force banks into punitive agreements or to plead guilty in case of criminal offenses. Using the conflict between the USA and Swiss banks over tax evasion by US persons, this article demonstrates that banks in the liberal economic system can no longer survive without access to the US-controlled, dollar-based financial system, thus giving the USA structural power over banks. In addition, it is shown that US structural power can be used strategically during negotiation processes to apply pressure on banks. Finally, while the use of this structural power was originally restricted to smaller banks, whose collapse would not endanger the world economy, US authorities have recently learnt to manage market expectations in a way that allows them to also target banks that were previously considered “too big to jail.”

Suggested Citation

  • Emmenegger Patrick, 2015. "The long arm of justice: U.S. structural power and international banking," Business and Politics, De Gruyter, vol. 17(3), pages 473-493, October.
    • Handle: RePEc:bpj:buspol:v:17:y:2015:i:3:p:473-493:n:2
    DOI: 10.1515/bap-2014-0046
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bap-2014-0046
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bap-2014-0046?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carla Norrlof, 2014. "Dollar hegemony: A power analysis," Review of International Political Economy, Taylor & Francis Journals, vol. 21(5), pages 1042-1070, October.
    2. Strange,Susan, 1996. "The Retreat of the State," Cambridge Books, Cambridge University Press, number 9780521564298.
    3. Palan, Ronen, 2002. "Tax Havens and the Commercialization of State Sovereignty," International Organization, Cambridge University Press, vol. 56(1), pages 151-176, January.
    4. Strange,Susan, 1996. "The Retreat of the State," Cambridge Books, Cambridge University Press, number 9780521564403.
    5. Daniel W. Drezner, 2007. "Bringing the Great Powers Back In, from All Politics Is Global: Explaining International Regulatory Regimes," Introductory Chapters, in: All Politics Is Global: Explaining International Regulatory Regimes, Princeton University Press.
    6. Pepper D. Culpepper & Raphael Reinke, 2014. "Structural Power and Bank Bailouts in the United Kingdom and the United States," Politics & Society, , vol. 42(4), pages 427-454, December.
    7. Andrew Hindmoor & Josh McGeechan, 2013. "Luck, Systematic Luck and Business Power: Lucky All the Way Down or Trying Hard to get What it Wants without Trying?," Political Studies, Political Studies Association, vol. 61(4), pages 834-849, December.
    8. Vogel, David, 1987. "Political Science and the Study of Corporate Power: A Dissent from the New Conventional Wisdom," British Journal of Political Science, Cambridge University Press, vol. 17(4), pages 385-408, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Culpepper Pepper D., 2015. "Structural power and political science in the post-crisis era," Business and Politics, De Gruyter, vol. 17(3), pages 391-409, October.
    2. Winecoff William Kindred, 2015. "Structural power and the global financial crisis: a network analytical approach," Business and Politics, De Gruyter, vol. 17(3), pages 495-525, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Culpepper Pepper D., 2015. "Structural power and political science in the post-crisis era," Business and Politics, De Gruyter, vol. 17(3), pages 391-409, October.
    2. Pritish Behuria, 2019. "The comparative political economy of plastic bag bans in East Africa: why implementation has varied in Rwanda, Kenya and Uganda," Global Development Institute Working Paper Series 372019, GDI, The University of Manchester.
    3. Paster, Thomas, 2015. "Bringing power back in: A review of the literature on the role of business in welfare state politics," MPIfG Discussion Paper 15/3, Max Planck Institute for the Study of Societies.
    4. Benjamin Cashore & Michael W. Stone, 2014. "Does California need Delaware? Explaining Indonesian, Chinese, and United States support for legality compliance of internationally traded products," Regulation & Governance, John Wiley & Sons, vol. 8(1), pages 49-73, March.
    5. Otusanya, Olatunde Julius, 2011. "The role of multinational companies in tax evasion and tax avoidance: The case of Nigeria," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(3), pages 316-332.
    6. Christine Trampusch & Florian Fastenrath, 2021. "States' interests as limits to the power of finance: Regulatory reforms in early local government financialization in the US and UK," Regulation & Governance, John Wiley & Sons, vol. 15(2), pages 245-261, April.
    7. Farrell Henry & Newman Abraham L., 2015. "Structuring power: business and authority beyond the nation state," Business and Politics, De Gruyter, vol. 17(3), pages 527-552, October.
    8. Marsh David & Akram Sadiya & Birkett Holly, 2015. "The structural power of business: taking structure, agency and ideas seriously," Business and Politics, De Gruyter, vol. 17(3), pages 577-601, October.
    9. Hilgers, Sven, 2014. "Manager of financial globalization? The European Union in global anti-money laundering and international accounting standard setting," PIPE - Papers on International Political Economy 22/2014, Free University Berlin, Center for International Political Economy.
    10. Arts, Bas, 2014. "Assessing forest governance from a ‘Triple G’ perspective: Government, governance, governmentality⁎⁎This article belongs to the Special Issue: Assessing Forest Governance," Forest Policy and Economics, Elsevier, vol. 49(C), pages 17-22.
    11. Keyan Lai, 2021. "National security and FDI policy ambiguity: A commentary," Journal of International Business Policy, Palgrave Macmillan, vol. 4(4), pages 496-505, December.
    12. Michele-Lee Moore & Frances R. Westley & Tim Brodhead, 2012. "Social Finance Intermediaries and Social Innovation," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 3(2), pages 184-205, October.
    13. Assen Slim, 2015. "L’aide européenne (1989-2020) aux PECO sous le prisme de l’économie politique internationale (EPI)," Post-Print hal-01271881, HAL.
    14. Simplice A, Asongu, 2011. "Government quality determinants of stock market performance in developing countries," MPRA Paper 35508, University Library of Munich, Germany.
    15. Mark Hallerberg, 2002. "Introduction," European Union Politics, , vol. 3(2), pages 139-150, June.
    16. Zoltan Adam, 2004. "Autonomy and capacity: a state-centred approach to post-communist transition in Central Europe," UCL SSEES Economics and Business working paper series 40, UCL School of Slavonic and East European Studies (SSEES).
    17. Lena Partzsch, 2011. "The legitimacy of biofuel certification," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 28(3), pages 413-425, September.
    18. David B. Audretsch, 2018. "Industrial Organization and the Organization of Industries: Linking Industry Structure to Economic Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 603-620, June.
    19. Sami Zemni & Koenraad Bogaert, 2011. "Urban renewal and social development in Morocco in an age of neoliberal government," Review of African Political Economy, Taylor & Francis Journals, vol. 38(129), pages 403-417, September.
    20. Anne Roemer-Mahler, 2013. "Business conflict and global politics: The pharmaceutical industry and the global protection of intellectual property rights," Review of International Political Economy, Taylor & Francis Journals, vol. 20(1), pages 121-152, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:buspol:v:17:y:2015:i:3:p:473-493:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.