November 03, 2012
Sir, in your “The self-defeating Greek rescue policy”, November 3 you write again about the need to have “banks recapitalized” But again, for the umpteenth time, over soon a decade now, you refuse to approach the question of “Capitalized in order to do what?”.
The fact is that capitalizing the banks, for these to keep on doing what they did, namely lending or investing excessively in “The Infallible”, because there was where regulators allowed them to earn the highest ex ante risk adjusted returns, and to avoid excessively lending to “The Risky”, like to small businesses and entrepreneurs, because there the overly sissy nanny regulators did not want them to go, then no recapitalization of banks can lead to any sustainable good result, and these will all be just other examples of kicking the can down the road.
It is clear that FT has been hijacked by bank regulators, like Mario Draghi, and is suffering from a severe bout of the Stockholm syndrome that impedes it to criticize what needs to be criticized in harsh terms. How can I help you to free yourself from it?