December 18, 2012

Mario Draghi is functionally incapable of understanding the “best fundamentals” for Europe.

Sir, Michael Steen reports “Draghi claims eurozone has ‘best fundamentals’” December 18.

Forget it! A former president of the Financial Stability Board, not of the Financial Usefulness Board mind you, and who most certainly thinks of discriminating in favor of “The Infallible” and against “The Risky” as a virtue is simply incapable of understanding the real “best fundamentals” of Europe?

With their capital requirements based on perceived risk and that effectively taxes all those without a top credit rating, and subsidizes those who got one, Draghi belongs to a baby-boomer generation of regulators characterized by wanting to keep it safe, in their life time, in the best “Après nous le déluge” style.

If Europe and the eurozone want to recover the possibilities of a bright future, instead of just trying desperately to slow its decay, then it needs bank regulators who can understand why we go to church and pray “God make us daring!”