Mario, for God’s sake, cut off the gas

Sir, Martin Wolf calls out “Be bold, Mario, put out that fire…” October 26. And I would call out “Mario, for God’s sake, first cut off the gas”. 

The capital requirements for banks based on perceived risk and the scarcity of bank capital is forcing banks out of anything that is becoming perceived as more risky and into what, for the time being, is still perceived as less risky. This is making the financing of the already perceived as risky so much more difficult while at the same tome creating the excessive exposures that will finally turn the last standing absolutely not-risky into the mother of all risks. Mario Draghi… or whoever… this gas that feeds the fire needs to be cut off, immediately.

On a side note since Martin Wolf writes “The capital to protect the European banking system from big defaults by important sovereigns simply does not exist” I cannot refrain from asking and whose fault is that? Could the regulators who allowed the banks to lend to sovereign against basically no bank capital have anything to do with that?