February 13, 2017

The failure of telling the truth about the role of bank regulators in Greece’s crisis helps create alternative facts.

Sir, Wolfgang Münchau writes: “The Greek crisis is only the most glaring example of failure to tell the truth…When the truth dies, we should not be surprised if alternative facts are put in its place” “A failure to tell the truth imperils Greece” February 2004.

Indeed! I agree with most of what Münchau argues, but first let’s start from the beginning.

When has it been explained to the Greek people that their current travails would never have happened, had some bank regulators not decided, on their own, that banks needed to hold so much less capital when lending to the Greek sovereign, than for instance when lending to American, German or Greek SMEs or entrepreneurs?

And how would they feel if they came to know that many of those who had direct responsibility in that huge regulatory mishap, were still involved in deciding its future?

Sir, how can you work yourself out of a crisis being helped by some interested in hiding vital truths about the cause of the crisis?