Decisions by politicians on how to deal with debt on both sides of the Atlantic will be crucial to prevent another Lehman-style crisis, economists and analysts told CNBC in a debate about banking in the European Union and in the US.
Europe and the US have taken different paths to return to economic growth, but they both have to face the dilemma of too much debt and a banking sector dominated by too-big-to-fail banks.
"Both economies are running neck and neck, this is all politics," Mary Jo Jacobi, former assistant secretary of commerce and former special assistant to the president, now senior advisor at The Leadership Agency, told CNBC.
"Any further crisis — and Greece is certainly looking like it, as someone said Greece has had a debt crisis since before birth of Christ and it’s certainly looking that way — it could certainly lead to financial crisis across Europe Lehman style that could go worldwide. The politics is going to have a lot to say about it," Jacobi added.
European countries are more exposed to external differences, and the idea that one policy is right for all in different situations "is the wrong way to look at it," John Kay, economist and author at the Financial Times, said.
"It's possible that American policy is right for America and European policy is right for Europe," Kay added.
Markets Pin Hopes on Merkel
The European Monetary Union is in crisis and the markets are assuming that German Chancellor Angela Merkel will be able to persuade her electorate to take on liabilities arising from the weaker euro zone member's inability to pay their debt, according to Liam Halligan, chief economist at Prosperity Capital Management.
"Is she strong enough to convince the electorate to take on the liabilities? Germany and France still have to take them on, that's the big issue," Halligan told CNBC.
One fundamental issue in dealing with the debt problem is reforming the banking sector, some of the experts said.
"What we're doing in the banking sector is having too much regulation and regulation that is useless," Kay said.
"We have increased bureaucracy that will prevent nothing. The next crisis that we will have is that this current crisis blows up. Next blow-up stage is that Greece will default again. Are Greeks or bankers more unpopular in Germany? It's a tough call," he added.
Elephant in the Room
The US is also, to some extent, a currency union with weak and strong member states; but a common language, a more flexible workforce, the dollar's status as the world's reserve currency as well as the fact that the country is the world's first economy have made the markets trust it more than the euro zone.
"You cannot the ignore the size of American debt, the state of California is broke, it's the elephant in the room," Jacobi said.
The dollar is likely to remain the reserve currency for a while, as its position is not threatened by the euro, but it will be challenged by emerging currencies over the longer term and US politicians are failing to factor in that threat, the analysts said.
"America is not interested in the rest of the world, it's interested entirely in its own problems," Stuart Fraser, chairman of the policy and resources center, City of London Corporation, said.
"America has always imposed whatever it wants without regard to what the rest of the world is doing. I do believe there is a change in the US. However, it is difficult to predict regarding currencies," Fraser added.