European citizens should question why their real economy has to go down, down, down

Banks all over Europe are allowed to hold much less capital when lending to a European sovereign, or to one of the world’s AAAristocracy, than when lending to medium and small businesses in their own nation.

Which means that banks all over Europe make much more expected risk-adjusted returns on their equity when lending to a European sovereign, or to one of the world’s AAAristocracy, than when lending to medium and small businesses in their own nation.

Which means of course that banks all over Europe love lending to a European sovereign, or to one of the world’s AAAristocracy, and dislike lending to medium and small businesses in their own nation.

And which means of course that the real economy in Europe, is going down, down, down,

And which means that citizens in Spain should ask their bank regulators:

Why need Spanish banks hold much more capital when lending to Spanish small businesses than when lending to France?

And while they’re at it…Why should Spaniards trust more the French government than a French small business? 

And all European citizens of all other European countries should ask their bank regulators similar questions

God make us daring! That is indeed a prayer current European bank regulators do not even begin to understand the need for.