To my mind the most shocking thing about the Greek situation is the massive failure of governance - presumably fostered by an enormous civil-society deficit (which might count as the subject of another rant entirely).
Which of course in no way contradicts your point about the urgent need for regulating speculative instruments.
ARGeezer:
I was not of the impression that the banks had accomplished governmental capture on the continent.
I think that (at least in Germany) the norm for a long time was a symbiotic relationship that focused on long-term earnings and stability ("Rheinischer Kapitalismus"). Of course this was not (at least in Germany) entirely without its seamier sides (I would link to a bio of Hermann Josef Abs here, but a google yields nothing adequate in English; (suffice it to say that he was a banker who made his bones during the pre-war Nazi era, rose to the head of Deutsche Bank, managed to hold onto that role after the war and was a major figure of the Wirtschaftswunder.) The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
Still, it has occurred to me in light of Greece that we haven't discussed good governance and civil society much here as such, particularly under the aspect of their complementarity (though I think they are often implicit in comments). The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
ROFL - my comment above is already the no. 4 google hit for 'maxim tremendous but trite'. All hail ET's almighty page rank! En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Germany expects every nation to do its duty.
I have to go along with Schäuble to the extent that the bar is higher for nations
As for doing something about Deutsche Bank, how will it and other German banks fare if Greece is forced to default? I have gathered that many German banks have less capital reserves than do US banks. The approach by government authorities in both the US and Europe is similar: "Hide the debt!"; "Deny the debt"; and pray that time will cure all insolvencies. Hope that works out better for Europe than seems likely for the USA. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
In addition, the USA sent $20+ billion in bailout money for German banks last year, which included a couple billion for state-owned KfW.
Schäuble must be aware of these deals.
