Anyone not denouncing the distortions produced by bank regulations has little right to lecture EU on morals

Wolfgang Münchau writes “Monetary policy mistakes caused a fall in Eurozone wide inflation rates that made it impossible for Greece and other periphery countries to improve competitive they lost in the early years of monetary union”, “By playing it safe for now, Europe puts its future at risk” March 2. 

And so what Münchau seems to suggest that all other European countries should produce high internal inflation, so as to allow Greece to be competitive. Sincerely, if I was a German, and that was the plan my government presented, I would immediate try to fire my government.

It is by playing it silly safe, with credit risk weighted equity requirements for banks, which blocks fair access to future builders like SMEs and entrepreneurs that Europe is putting its future at risk.

Of course “EU should have confronted Greek debt… early on” but, without getting rid of the distortions produced by regulations in the allocation of bank credit to the real economy, that would not have mattered.

PS. Mr. Münchau, give us one single bank crisis resulting from an excessive exposure to something that was perceived as risky when banks placed that asset on their balance sheet.