November 10, 2014

Economic stagnation is doomed to happen as a consequence of credit-risk-weighted capital/equity requirements for banks.

Sir, Wolfgang Münchau holds that secular stagnation in the Eurozone is very probable “The euro is in greater peril today than at the height of the crisis” November 10.

It is worse than that, stagnation is doomed to happen, as a result of credit-risk-weighted capital requirements for banks that impede the access to bank credit of many who though “risky” would provide the new sources of growth Europe needs to move forward.

Frankly, where does Wolfgang Münchau believe his Europe would be had these risk-adverse regulations been adopted some two hundred years ago?

Again: Europe is denying its children the risk taking it took for the European parents to prosper. Shame on it!