Europe and America, do not discriminate against your economic growth engines, or you will stall and fall.

Sir, Wolfgang Münchau in “What not to worry about in the eurozone crisis” November 19 declares that the first of his worries “is the impact of austerity on growth”. I completely agree, but what most worries me is not any fiscal or monetary austerity to which Münchau would refer to, but to the risk-taking austerity that has been introduced into our banking system by capital requirements that are much lower on exposures to “The Infallible” than to exposures to “The Risky”. 

That regulation, especially in times of severe scarcity of bank capital, is stopping all access to bank credit for those officially perceived as risky, like small businesses and entrepreneurs; and channeling all bank funding to fewer and fewer quite unproductive safe-havens, so much so that these havens are also becoming dangerously overpopulated. 

If the eurozone, the whole Europe and America too, want to save their economies they’ve got to rid themselves of this regulatory discrimination against some of their most fundamental growth engines and understand that without considerable risk-taking, they will stall and fall.