December 11, 2012
Sir, Olli Rehn writes “The eurozone is living through lean times, but there is light at the end of the tunnel”, “Austerity is working – Europe must stay the course”, December 11.
Forget it, Europe and America have been placed by bank regulators into a tunnel of obscurantism which preaches the belief that development and economic growth can be achieved by avoiding risks.
As an expression of that, banks are required to have much more capital when lending to those considered as “The Infallible” than when lending to “The Risky”. And, since that effectively signifies blocking the intakes and the escapes of the tunnel, there is just no light to be seen.
And I refer of course to free market driven risk-taking, and not to any government sponsored risk taking, and which is what regulators would seem to favour when allowing the banks to lend to governments against much less capital than when lending to the citizens.
In other words Europe, and America, in order to stop stalling and falling, need regulators who know about the importance of praying “God make us daring!”