First, they represent a break in the process of European catching-up and a resumed widening of the productivity gap with the U.S.. Second, the broad tendencies across the Atlantic are no longer aligned, so we cannot explain them with the occurrence of a worldwide adverse shock, such as oil in the 1970s. The roots of the European productivity slowdown must be found within Europe.
In particular, he posits that the shift from depository intermediation to professional asset management has increased tail risk to socially excessive levels and has left the world more vulnerable to rare but potentially very serious tail events; he suggests some ways in which regulation should be increased.