​​Too many, FT included, approve of postponing all cleansing, even knowing that will make the après nous le deluge so much worse.

Sir, as an Executive Director of the World Bank, 2002-04, in a Risk Management Workshop for Regulators I argued: “A regulation that regulates less, but is more active and trigger-happy, and treats a bank failure as something normal, as it should be, could be a much more effective regulation. The avoidance of a crisis, by any means, might strangely lead us to the one and only bank, therefore setting us up for the mother of all moral hazards—just to proceed later to the mother of all bank crises”

And in 2006 in a letter published by FT in 2006 I argued for the “Long-term benefits of a hard landing”.

And so you should be able to understand how much I agree with Roger Blitz’s “Central bank medicine risks creating addicts”; subtitled “Regulators’ desire to treat all ills is storing up problems for the future” July 21

@PerKurowski ©