The barrels of the economy must be cleaned before ECB fires its 357 Magnum

Mario Draghi belongs to that wimpy generation of regulators which so concerned with banks taking excessive risks created, by means of capital requirement based on perceived risks, the mother of incentives for the banks to dedicate themselves almost entirely to doing business with the “not-risky”. And, consequently, we are suffering this huge crisis of obscene obese bank exposures to what being officially perceived ex ante as absolutely not-risky turned out, ex post, to be very risky. 

In “The ECB talks tough on the euro” July 28, you now cast Draghi as Dirty Harry and mention that “relaunching ECB bond purchases or granting a banking license to the European Stability Mechanism”, can be “game changers”. Forget it! 

If the barrels of the economy are not clean of those regulatory obstacles which impede the “risky” small businesses and entrepreneurs to help out, Draghi’s 357 Magnum will backfire.