More dynamite planted
– “For some time, there has been a tacit agreement among central bankers and the financial ministers of key economies not to allow any bank large enough to jeopardize the system to go under — no matter what the cost. But, on Sunday, the question arose whether this agreement should be formalized and made public. The central bankers decided against the idea, reasoning that it would practically be an invitation to speculators and large hedge funds to take advantage of this government guarantee.
Everyone involved knows how explosive the agreement is. It essentially means that while the profits of banks are privatized, society bears the cost of their losses. In a world in which the rich are getting richer and the poor poorer, that is political dynamite.” –
http://www.spiegel.de/international/business/0,1518,druck-543588,00.html
Comment: It is a a tragic farce that the very same institution that brought about the mess by irresponsible monetary policy is about to be empowered with more regulatory authority: http://biz.yahoo.com/ap/080330/fed_overhaul.html
posted by Antony Mueller