There should be a growth market in tea-parties.
Sir Gillian Tett is too forgiving when she describes as a “perverse situation” that “the Europeans banks are now net sellers of insurance against the chance of their own governments going into default – even though those same banks are implicitly backed by those governments”, “CDS market needs reform if more drama is to be avoided” December 18.
It is worse than so, it goes to the heart of what could be deemed to be an immense collusion of interests between big governments and big finance, which starts with the fact that banks in many countries, courtesy of the regulators, are required to hold zero percent in capital when lending to the government and therefore leveraging even more its power.
That an ordinary citizen’s borrowing gives cause for an 8 percent or more capital requirement for banks while the same lending to the governments cause a zero requirement must be a dream come true for any government. There seems to be a growth market in tea-parties all around the globe.
It is worse than so, it goes to the heart of what could be deemed to be an immense collusion of interests between big governments and big finance, which starts with the fact that banks in many countries, courtesy of the regulators, are required to hold zero percent in capital when lending to the government and therefore leveraging even more its power.
That an ordinary citizen’s borrowing gives cause for an 8 percent or more capital requirement for banks while the same lending to the governments cause a zero requirement must be a dream come true for any government. There seems to be a growth market in tea-parties all around the globe.
Posts
