Is Europe going from being unintentionally murdered, to suicide, and now to euthanasia?

Sir, Paul de Grauwe writes that if financial stability is to be maintained, a central bank needs to be the lender of last resort to banks and government “because the sovereigns and the banks hold each other in a deadly embrace”, “Stop this guerilla campaign against ECB policy” October 23. 

Yes, but, what if the financial instability was also caused by that same “embrace”? 

I know, and I trust de Grauwe by now also knows (he should) that, had not bank regulators imposed capital requirements which allowed banks to hold very little sometimes even zero capital when lending to European sovereigns, members of “The Infallible”, while at the same time requiring these to hold 8 percent in capital when lending to European small businesses and entrepreneurs, members of “The Risky”, the current eurozone crisis would not have been close as severe as it is. 

And so I wonder whether this regulatory absolute failure needs not to be discussed first, and a plan how to remedy it designed, before ECB assists. Otherwise it just seems to present the characteristics of an unintentional murder, by regulators, muting into a suicide, by sovereigns, kicking the can down the road, and now then muting into a case of euthanasia, by the ECB 

PS. Don´t worry, I am not giving up on making the bank regulatory establishment (and FT) understand… and confess.