August 29, 2012

Don´t prime pumps, when unclogging the tubes is needed

Sir, John Plender, referring to the annual gathering of central bankers at Jackson Hole, writes “Policy makers agonize over how best to prime the pump”, August 29, 2012. How sad they will waste their time agonizing over the wrong problem. When the tubes are clogged, you need to unclog these before priming the pump. 

Current bank regulations, specifically the capital requirements for banks based on perceived risk, are hindering the flow of credit from reaching those we most need for it to reach, namely the job creating small businesses and entrepreneurs.