Size really matters, if you define it right

Not unusually, I was a bit incoherent in my previous post on bank size. On the one hand, I wrote…

…a sufficiently levered and inter-contracted microbank could take down the world as surely as the Citimonster.

On the other hand…

…limiting size defined by total asset base plus an expansive notional value of all derivative and off-balance sheet exposures limits both interconnectedness and leverage.

If limiting size constrains leverage and interconnectedness, how could a microbank get to be so interconnected and level as to bring on armageddon?

The key, of course, is in the definition of size. Entities that are small in terms of number of people involved and level of capitalization certainly can blow things up, by loading up on traditional leverage (debt) and untraditional leverage (derivative exposures, off-balance-sheet contingent liabilities). AIG might have been a big firm, but the unit that blew up the world amounted to a handful of people in a well-appointed London garage. The “bigness” of AIG mattered only insofar as it permitted that tiny operation to lever up, by taking on trillions of dollars in notional CDS exposure.

But if size is defined properly to mean the total scale of assets to which a firm is exposed, including balance sheet assets plus the notional value of any derivatives plus any off-balance-sheet commitments, then size is basically everything. Suppose there was a bank levered 10000:1. Sounds pretty bad, huh? But suppose the bank has precisely one penny of equity against a hundred dollars of assets. That might suck for the fool who lent the hundred bucks, but the rest of us can sleep easily. Leverage alone can’t cause crises: it’s only when an entity is levered up to some systemically troubling size that bad things happen.

That doesn’t mean we could regulate bank size and then ignore leverage: If all banks had $100 on assets against a penny of equity, we’d end up with a lot of bank failures, creditor bailouts, and sleepless nights. What size limitations do is prevent mistakes or misdeeds at any one or few firms from becoming all of our problem. Smallness also reduces the likelihood of misdeeds, since dumb gambles have a bigger payoff for managers at big banks than at modest thrifts. Some banks will always slip through regulatory cracks. If they are small and few, that’s not a problem. If they are big or many, we’re screwed.

Size limits, like leverage and risk constraints, will inevitably be gamed. There will always be fuzziness surrounding what sort of contingent liabilities should fall under a size calculation, and bank lobbyists will work assiduously to create loopholes. Adding hard limits on size and trying to police them won’t be a panacea. But faking small might be harder than faking well-capitalized. Plus, forcing banks to appear small may help to keep banks actually small, since counterparties get nervous about offering sneaky, uncollateralized leverage to banks that look like they are small enough to fail.

In the end, banks-as-we-know-them are flawed by design. They serve an important purpose, but do so in a manner that is predictably prone to failure. If your roof has a leak and water drips in, one way to handle the problem is with a bucket. That approach can be effective, but it demands constant supervision. There is always the danger of some lapse of attention, then whoops!, the bucket overflows and your floor is ruined. Resolving to watch the bucket very carefully by, say, titling yourself the integrated bucket super-regulator might help, a bit. But even super-regulators need the occasional bathroom break, and buckets are notorious for tempting super-regulators with songs of free water flows and offering cushy jobs if they look the other way. Imposing size and leverage constraints on banks is like replacing a small bucket with a big washtub: You’ll still have problems if you don’t watch the thing, but the occasional lapses in supervision are less likely to conjure the Great Flood. Of course, the best way to manage a leak in the living room would be to stop messing around with buckets and patch the roof instead. To do that, in my opinion, we’d have to separate the credit and investments function of banks from the payment and deposits function, and draw an enforceable bright line between guaranteed claims and risk investment.

But if we’re too scared to climb that ladder, I suggest we get the biggest washtub, — I mean, the tightest size restrictions — that we can possibly manage. Promising to stare very sternly indeed at the same old bucket just won’t cut it.

p.s. if you haven’t seen it, I really like James Kwak’s Frog and Toad post on the difference between supervisory and structural approaches to regulation.


32 Responses to “Size really matters, if you define it right”

  1. Mitch writes:

    and buckets are notorious for tempting super-regulators with songs of free water flows and offering cushy jobs if they look the other way.

    …and that metaphor was going so well, too…

  2. BSG writes:

    Steve – in a recent post you proposed a number of reform measures that included the effective elimination of fractional reserve banking (you didn’t put it that way directly but clarified in a comment, if memory serves.)

    I am wondering if you think that strict regulation of size (as you define it here) would still be necessary if the other, perhaps more fundamental, reforms are carried out.

    Do you think big-bank lobbyists would be less effective in blocking size restrictions vs. more fundamental reforms?

    My sense is that the political environment is nowhere near ripe for “filing” Lord Acton’s inevitable People v. The Banks, but the likely epically tragic aftermath of the ongoing looting may, shall we say, change things.

    I’m all for incremental improvements if that’s the best we can do politically. But if the industry will fight tooth and nail any proposal that clips their wings (beyond mere appearances, of course), we may as well go for the gold. (No pun intended – really, I swear!)

  3. babar writes:

    I’d like to coin the term ‘Bitibank’ for this idea.

    For me to agree with this idea you would have to convince me that:

    1) you wouldn’t have massive simultaneous failures of small and similar banks when a large cycle/bubble tops out and pops/crashes

    2) it could be implemented globally (otherwise capital flows would circumvent it)

    If you can’t meet both conditions, there’s no point — you are actually in a worse situation than you are with a diversity of bank sizes which is what we have now.

  4. babar writes:

    > AIG might have been a big firm, but the unit that blew up the world amounted to a handful of people in a well-appointed London garage. The “bigness” of AIG mattered only insofar as it permitted that tiny operation to lever up, by taking on trillions of dollars in notional CDS exposure.

    I disagree. The currency that AIGFP had was the AAA rating of AIG. If they hadn’t had that, their insurance would have been useless. Nobody would have bought it and nobody would have considered it for reserve purposes. It wouldn’t have been a problem.

  5. mitch — breaking the metaphor was my favorite part of this post. i literally giggled. i think that’s like admitting to being fond of bad science teacher jokes.

    bsg — i would very much rather we move to a narrow banking scheme, which (as JKH put it in the previous comment thread) would make banks basically a user-interface layer between households and businesses and the federal reserve. if we did this (and did it for real, ensuring narrow banks had no speculative book of their own whatsoever, and do not expand frictional transactional credit into a secret lending book), then my concern about size would largely, but not entirely, disappear. we’d still have ordinary anti-trust issues (but a handful of big narrow banks would probably be sufficient to address those), and there’d still be a political economy concern (big banks would almost certainly skew regulation and procedure at the Fed to create barriers to entry). however, what might evolve under a narrow banking scheme is essentially the disappearance of banks, replaced by a thin IT layer. it might look like the credit-card merchant account system, where a wide variety of players can plug into a common transactions network, charging small fees for the service, and no one much notices who’s who. of course the investing role of banks won’t just go away — it will have to be replaced, and i think might have to be jumpstarted by active policy. there should be some place that small entrepreneurs can go to pitch their business plans, and the existence of a ubiquitous and subsidized banking system has prevented an independent local investment funds business from evolving.

    i’m very happy to “go for the gold”, but the two aren’t mutually exclusive. i think it’s really status quo banks that will determine how radically they are altered, and so far they are angling for extreme changes by resisting the relatively modest concessions that would be required to salve the wounds of injustice and make the status quo more palatable. if PPIP turns into a large transfer from taxpayers without visibly reviving the economy, perceptions of what is extreme may well change. the incumbent large banking community is foolishly prideful: if they negotiated a managed reorganization / baby-bell solution they could control it. policymakers would be delighted to have existing institutions run their own necessarily complex public executions, while the inside executioners mostly stay with when phoenix rises from the ashes. there’d be symbolic defenestrations at the top, but as long is the middle is intact, the same broad community would end up running the same basic show, albeit in a new era of conspicuous humility and reduced compensation. instead they are going “all in” (sorry felix), hoping to gird up, suck away taxpayer support, and weather the storm with mostly cosmetic changes. that be might succeed, but if it doesn’t, it will work out badly for them. they still don’t believe in the lower tail, and are blind to the correlation structure of tail risk: once you start getting 100 year floods (sorry fargo), you might get lots of them.

    babar — see the previous post. in any decent status quo banking system, regulators will need to regulate top-down asset allocation to ensure diversity of the aggregate banking system portfolio, even if that means vetoing “private market” credit decisions to, say, pile into CRE. again, regulatory solutions are fragile. but conditional on regulatory failure, many small failures are more manageable than one big zombie. fundamentally, a bad aggregate portfolio will bite a leveraged banking sector no matter what. but i’d argue that even accepting the inevitability of inadequate regulation, small banks are a bit less liable to take on foolish risks, both because they avoid the tantalizing incentives of sale and the overprovision of unmonitored funds. in a small bank regime + deposit insurance and regulation, regulatory lapses may lead to periodic S&L-style crises. but they will not lead to crises where not only have the banks failed, but there is no incentive-compatible means of resolving the failures. re (2), good point. i believe in free trade of current goods and service, but i don’t think we are going to have any reasonable degree of financial or economic stability without making international capital flows a legitimate object of policy management. in particular, we’ll need to consider restricting cross border investment to equity or fdi style arrangements and/or enforcing a balance constraint on the cap/current account of large, mature, diversified economies. (smaller economies might sometimes need to balance over a cycle, run a deficit to capitalize tradables production, then run a surplus or at least revert to balance thereafter, but the case that sustainable growth of large, diversified economies is constrained by access to external capital is weak, and even small economies have to be very well managed to run a deficit or a large suprplus usefully.)

    re: aig, we’re not disagreeing. big is necessary (though of course not sufficient) for a single name corporate to be AAA. an independent AAA AIG FP that market participants treated as zero-risk would have done just as much damage as the real AIG FP, but it would have been implausible. rating agencies wouldna done it, and counterparties wouldna relied on it.

  6. babar writes:

    thanks for the response. i’ll think some more.

    one objection i haven’t heard against a size limit is that i would think (arbitrarily, without proof) that a very heterogeneous system would be more resilient than a homogeneous one. and a size cap would probably yield a very homogeneous system.

    re aig: i would like a crystal ball to see exactly what the systemic implications of an AIGFP failure would have been. a failure at the top level would have been a disaster and an international incident. however, i am unconvinced that wiping out the CDSs in AIGFP’s portfolio would have had a material effect in the risk that counterparties were bearing. regulatory forbearance would have been necessary and perhaps sufficient. i don’t think that we need to take the ‘nuclear briefcase’ analogy literally, at least not without further detailed evidence. i am not sure that this affects your core argument though.

  7. BSG writes:

    Steve – makes sense. You put it well when you said “it’s really status quo banks that will determine how radically they are altered”.

    I think the same can be said of the Fed – every time they double down and it doesn’t blow up in their face, they seem to get bolder, thus making it all but inevitable that they’ll lose control and (hopefully?) lose their franchise.

    If all of these players acted with restraint, they could possibly hold on to their franchise indefinitely. It would still be looting and it would still be harmful, but they would probably get away with it (as they have for centuries). Instead their greed combines with hubris and gets the best of them.

  8. Bruce writes:

    “the bucket overflows and your floor is ruined”

    You must have hardwood floors?

    Why did we allow J.P. to swallow Bear &WaMu, BAC to digest Merrill, Wells Fargo to buy Wachovia…? Won’t all these eventually be unwound, split up, or downsized?

  9. Bruce writes:

    What’s the difference between, say, anti trust laws limiting a company’s market share and some regulation limiting a company’s balance sheet to a percentage of GDP? Or their employment to a percentage of the population? The economy is a portfolio, it should be diversified.

    If a company gets that big, either by its balance sheet or employment, you can bank bet on something funny going on!

  10. David Merkel writes:

    From my recent note: The Great Omission

    Perhaps it would be better to limit the total assets of any single financial firm, such that any firm requiring more than a certain level risk based capital would be required to break up.

    My view is that the risk is proportional to the degree of financial intermediation and riskiness of it versus liquid slack capital.

  11. mittelwerk writes:

    seems to me that the “size” of a modern financial intermediary is purely a function of credit-market players’ assumptions about the “size” of any underlying central-bank guarantee, either direct or recursive; as well as central-bank subsidization of opportunity costs via the fed-funds rate.

  12. Jeff MacKenzie writes:

    What’s wrong with (not-so-simply) freezing the superleverage economy–all the toxic assets out there,i.e. the worldwide derivatives markets–in place, accomplished by getting all(or at least most)of the world regulatory bodies on board, using the persuasive argument that a freeze is better than a collapse? All the banks, hedge funds, etc. that have positions in this market would thus neither win nor lose–for the time being. An unwinding of the toxic assets could then take place at a more leisurely pace.

    Meanwhile, all the credit extending agencies like banks, brokerage houses, funds of various sorts,etc. are enjoined to use their remaining assets (and whatever bailout funds come their way)to do what they should have been doing all along–extending credit to borrowers in the production economy.

    The superleverage economy would remain frozen and sorted out over a decade or so. Those lenders who cannot make money in the production economy would be allowed to fail, based on their performance in the real world. Whatever toxic assets they hold in the frozen superleverage market would thus not immediately bring down all the counterparties, and measures can be worked out over time to protect them from ultimate failure. But ultimately the superleverage economy will have to be limited–its scope perhaps maxxing out at 1:4 leverage, and all trades done on a regulated exchange like the CBOE.

  13. RichL writes:

    Tow points- The AIG mess was much more than CDS problems. Refer to the link below for details-

    Second, in the 70’s, Franklin National wasn’t a powerhouse when it went out, but in combination with the Bank Herstatt failure there were some systemic issues.

  14. reason writes:

    I’m tending to the view that the best approach would be put a strict upper limit on leverage of limited liability companies. If you want to gamble, do it with your own money.

  15. vlade writes:

    Jeff McKenzie – freezing the derivatives markets would be thinkable in a near-collapse situation, but not under normal circumstances.

    Despiste a lot of press on “toxic derivatives”, majority of the derivatives (albeit likely smaller than few year ago) still serves commercial purpose – basically making forward cashflows known, so that better forward plannig by a commercial company can take place. Miners/oil companies would suffer if you stopped trading commodity derivatives, so would exporters/importers if you denied them a chance to hedge FX. Utilities still will want to swap their inflation income into known cashflows, and companies still want to fix financing costs with IR derivatives.

    Futures have been around for hundreds of years, so have options. The fact they survived means they probably do add value to the economy.

    It’s the credit derivatives which are the killer (for more reasons than this post allows to ennumerate, ranging from the valuation methodology, via risk, to pure commercial/economical reasons). You could add correlation derivatives to the mess, but when you combine correlation and credit and leverage, then you end up with a deadly soup.

  16. reason — i added a late response to a comment of yours re LL in the previous thread. re this comment, i think your suggestion is pretty good. i’d suggested drawing a line between “real economy” and financial firms, but a leverage limit might be more natural, it sounds like “limited liability, up to a limit”. some drawbacks are that it creates uncertainty in contracts: individual creditors don’t really know (unless they specify) whether debt is recourse or nonrecourse to equityholders, as it depends on leverage. plus, leverage is gamable, and firms that want to lever would have incentives like banks to hide and synthesize leverage in order to minimize leverage-as-calculated-for-LL-purposes. still, i think it’s a good idea, maybe as one piece of a several pronged legal test by which judges would decide whether a firm qualifies as a “real economy” enterprise or a financial intermediary.

  17. RueTheDay writes:

    I’m not sure that only imposing the leverage limit on limited liability corps solves the problem.

    While a financial firm organized as a sole proprietorship would be a lot less likely to make hugely levered bets, there is always the option of personal bankruptcy as an (admittedly disagreeable) “out”. Many would still be willing to take outrageous risks. Perhaps re-instituting debtor’s prisons in those cases might help.

  18. RTD — absent unduly generous “homestead exceptions” and stuff, personal bankruptcy is punitive to all those with substantial capital to invest. i’d be absolutely opposed to stronger punishment for debtors — in the end, creditors have to rake some responsibility too. LL financial firms attach to the reputational capital of well-known and wealthy managers and firms without attaching to their financial capital, sometimes snookering crteditors. eliminating LL for financials would mean that those whose reputation is associated with a fund or bank (by virtue of having put up capital) would also have their wealth at stake. i think that would be more than sufficient.

    of course, in a credit bubble like we recently experienced, there will be some low capital, low income people playing the personal bankruptcy option by overaccepting indiscriminate leverage. but when creditors are so foolish they fund what they themselves call NINJA loans, we’re gonna have to change things on the funding side.

  19. reason writes:


    Historically, the merchant banks were much more conservative when they were partnerships.

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  21. PSC writes:

    The test for size should be that an intelligent numerate individual with a 3-6 month training in accounting should be able to read a 30 page description of the company and a 30 page set of accounts in an afternoon and form a reasonably accurate opinion on the solvency of the company.

    If this cannot be done then the company is too big, since it is beyond the capability of people to analyze. If this cannot be done then what hope do people in the company have of understanding divisions other than their own, and evaluating the risks in those divisions?

    What hope does an investor have?

  22. babar writes:

    Steve — are you saying that a bondholders/equity holders in a bank should take an unlimited liability for the bank’s actions?

    why would anyone put up money for a bank in this case?

    also — easy enough to game that. (i start a bank, raise capital, poison my uncle’s river, he sues me and cleans out my investors.)

  23. babar — partnerships have existed, in finance as in most industries. this is not actually a very radical idea. it has been done — gs, after all, was until very recently a partnership, as were the other IBs a couple of decades ago. lloyds of london famously has had recourse to its partners, after they became lazy and treated partnership as a profitable honor rather than an obligation to monitor and control.

    in general, no LL is a bad idea if you want very large scale investment, via a single entity, because without LL, all partners must be intimately involved in the management of the firm, or else have very great confidence in their delegates. otherwise they would be subject to the kind of ruses you describe. the possibility of such ruses is precisely why this is a good idea: principals must be, or else must control, their agents if they want to be in banking.

    there is in theory the possibility you describe, that no one would be willing. historically, though, that hasn’t happened, because you can make good money in banking and finance. (one might argue that in today’s more competitive industry, margins are to slim, but i doubt that.) a well managed financial firm has many options to protect itself from risk, from investing only its own equity, to obtaining explicitly nonrecourse financing on a leveraged portfolio, to accepting recourse financing but managing risk/leverage so that failure beyond paid capital is implausible even in a terrible macro environment. a LL bank might accept deposits fairly freely, but invest the majority only in Treasuries, and offer depositors low interest or even charge fees. alternatively, the bank might try to reach for profit by offering higher interest to attract deposits and invest more aggressively, but that would be at partner/manager risk before it was at taxpayer risk. it seems like a pretty fair setup to me.

    in general, the model is only serviceable for smaller, closely held, carefully managed enterprises, not monstrosities with lots of shareholders to bilk. again, feature, not a bug.

  24. raivo pommer-eesti writes:


    Japan 150 Milliard

    Der japanische Ministerpräsident Taro Aso hat heute ein neues Konjunkturpaket im Umfang von 150 Milliarden Dollar vorgestellt.

    In der Landeswährung sind das 15 Billionen Yen, in Franken 174 Milliarden. Zwei frühere Konjunkturpakete hatten einen Umfang von zusammen 12 Billionen Yen. Finanziert werden sollen die staatlichen Stützungsmassnahmen mit der Ausgabe neuer Anleihen.

    Es gehe darum, den Lebensstandard der Bevölkerung zu sichern und weiteres Wachstum zu unterstützen, sagte Aso in einer Fernsehansprache. Die neuen Ausgaben haben ein Volumen von etwa drei Prozent des Bruttoinlandsprodukts. Die japanische Staatsverschuldung beträgt zurzeit 170 Prozent des Bruttoinlandsprodukts und ist damit so hoch wie in keinem anderen Industriestaat.

  25. HopsToill writes:

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  26. raivo pommer writes:



    The absolutism of the key tenets of neo-liberalism: privatisation, deregulation, balanced budgets have all been rejected by all but the most dogmatic. Apart from one that is: the primacy of free trade.

    Its status is basically sacrosanct. While banks are being nationalized, bonuses recalled, and trillions of dollars of debt racked up, while pretty much every other concept, belief or ideal is being interrogated, contorted or just set aside, “Free trade is good” continues to be presented as a totemic truth, ring-fenced from debate or interrogation. Any questioning of this axiom is not even on the G-20’s agenda.

    In fact the Free Trade brigade, which encompasses most mainstream politicians, business leaders, and thinkers — outside of France that is — seems to be on evangelical overdrive. “The solution to the crisis is more free trade,” says Brazilian President Luiz Inácio Lula da Silva. China’s Commerce Minister Chen Deming announces that Beijing is “firmly opposed to trade protectionism,” a sentiment often echoed by Germany’s Chancellor Angela Merkel, while British Prime Minister Gordon Brown expressly warns against abandoning “the gospel of free trade.”

  27. raivo pommer-eesti writes:


    Wall Street erwartet gespannt Bankbilanzen

    Mit großer Spannung erwartet die Wall Street nach den Ostertagen die Quartalsbilanzen mehrerer Schwergewichte unter den US-Banken. Nach positiven Andeutungen einiger Bankchefs erhoffen sich die Anleger erste Signale einer beginnenden Erholung der Branche in der Finanzkrise.

    Eine Reihe von Analysten warnte aber bereits vor zu hohen Erwartungen. Die Spannbreite der Ergebnisse dürfte groß werden: Mit Goldman Sachs und J.P. Morgan Chase wird bei zwei Institute mit Gewinnen gerechnet, die sich in der Krise bisher noch vergleichsweise gut schlugen. Erneut rote Zahlen erwarten Analysten dagegen bei der Citigroup, die zu den weltweit größten Opfern der Turbulenzen gehört. Bereits kurz vor Ostern hatte die Großbank Wells Fargo mit der Ankündigung eines Rekordgewinns für eine Überraschung gesorgt.

  28. raivo pommer-eesti writes:



    The report praises efforts by some leaders, such as Brazilian President Luiz Inacio Lula da Silva, to reject or reverse decisions aimed at making it harder for companies in foreign countries. President Barack Obama was also commended for ensuring that “Buy American” provisions in the United States’ $789 billion stimulus package comply with international agreements.

    But its shame list was longer. In the footwear sector alone, Argentina, Brazil, Canada, Ecuador, the European Union, Turkey and Ukraine have enacted or are considering measures designed to slow imports from China or Vietnam, the report showed.

    Australia, Brazil, Britain, Canada, France, India, Russia, and the United States were cited for automotive tariffs, subsidies, credits, licenses or other changes deemed dangerous to trade.

    Argentina, the 27-nation EU, Egypt, India, Indonesia, Malaysia, Philippines, Russia, Turkey, the U.S. and Vietnam were listed for protective steel regulations.

    It was Lamy’s second report on protectionism this year. Future reports are expected every two months as the WTO steps up its monitoring of the crisis.

  29. raivo pommer writes:



    Europa ist bei der Bekämpfung der Weltwirtschaftskrise nach Ansicht des Nobelpreisträgers Paul Krugman auf dem falschen Weg. „Die Vereinigten Staaten haben recht, Europa hat unrecht“, sagte der Wirtschaftswissenschaftler, der in den vergangenen Monaten besonders die deutsche Regierung für ihre abwartende Haltung kritisiert hatte. Die Mitgliedstaaten der Europäischen Union müssten viel aggressiver als bisher versuchen, die Wirtschaft durch Konjunkturprogramme anzukurbeln. Dabei wies er Bedenken zurück, dass die großzügige amerikanische Intervention die Inflation beschleunigen und das höhere Defizit den Haushalt zu stark belasten könnte. „Eine Billion Dollar mehr wird das Problem nicht wesentlich vergrößern“, sinnierte der Hochschullehrer von der Eliteuniversität Princeton am Montagnachmittag auf einer Pressekonferenz in New York.

    Krugman wäre nicht der scharfzüngige Kolumnist und Buchautor, wüsste er nicht eine scheinbar simple Antwort auf die drängende Frage, wie eine Neuauflage der Großen Depression zu vermeiden sei. Er forderte staatliches Handeln auf breiter Front, ohne allzu sehr ins Detail zu gehen: aggressive Strategien, um die Kreditklemme auf den Finanzmärkten zu beseitigen, ein weiter Gestaltungsspielraum für die Geldpolitik, umfangreiche Konjunkturprogramme. „All diese Maßnahmen haben in der Vergangenheit gewirkt, und sie werden ohne Frage auch diesmal helfen“, betonte er.

  30. raivo pommer-eesti writes:



    Nach schweren Kursverlusten ist an den Aktienmärkten in den vergangenen Wochen wieder ein gewisser Optimismus eingekehrt. Anleger legen sich Aktien ins Depot, da sie hoffen, Konjunkturprogramme und extrem lockere Geldpolitiken würden die Wirtschaft aus der Krise bringen.

    Die Erwartungen richten sich vor allem auch auf China. Das Land habe noch starkes Wachstumspotenzial, die angekündigten Stimulationsprogramme seien groß und die Geldpolitik sei sehr expansiv, heißt es. Aus diesem Grund könne kaum überraschen, dass die chinesischen Aktien stark nach oben liefen. Der Shanghai Stock Exchange Composite Index hat seit Jahresbeginn immerhin knapp 40 Prozent zugelegt.

    Michael Pettis teilt diesen Optimismus nicht. Der ehemalige Bondhändler und Professor an der Peking University fragt sich, ob Konjunkturprogramme und lockere Geldpolitiken der Weltwirtschaft tatsächlich etwas bringen werden. Zwei Dinge treiben die Kurse an der chinesischen Börse, erklärt er weiter: Liquidität und erwartete Regierungseingriffe.

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  32. raivo pommer-eesti writes:



    Es ist ganz erstaunlich: Bis vor einem Jahr war die Heimreise aus Italien nach Deutschland immer auch eine Reise in die nationale Depression. Oben auf dem Jaufenpass verliess man die offenherzige Region Meran und nähert sich Österreich, das in seiner Enge schon einen Vorgeschmack auf die Düsternis des Nordens bot, und auf der Passhöhe blickte man ein letztes Mal sehnsuchtsvoll zurück auf dieses Land, in dem das Leben erst mal schön ist, und dann schaut man weiter. Man drehte sich um und wusste, was hinter all diesen Hügeln kam: Verärgerte alte Männer in Anzügen, die nie genug bekommen konnten.

    Nie genug von Liberalisierung, nie genug Fördermittel, nie genug Unterstützung von der Politik, nie genug Entlastung und Steuersenkungen. Natürlich ist Deutschland nicht so schön wie Italien; in manchen Regionen ist es sogar richtig hässlich und heisst Berlin oder Essen oder gar Hoyerswerda, aber nirgendwo, unter keinen Umständen war es so scheusslich, so unerquicklich und von bornierten Leistungsverweigerern, Sozialfällen und Inkompetenz belastet wie in den Reden dieser Männer, die man selbst auch nur begrenzt als “schön” titulieren kann, ohne sich dem Vorwurf der glatten Lüge oder des Wirtschaftsjournalismus auszusetzen. “Standortdebatte” nannte man diesen verbalen Wettlauf um die Verhässlichung und Herabwürdigung des Landes durch alte Männer, und damit war sie als ökonomisch notwendig geadelt, selbst wenn man ähnliche Beschwerden, so sie von unten kamen, als “Gleichmacherei”, “Kommunismus” oder “typisch deutsche Neidkultur” abtat: Deutschland, ein kommunistisches, neidiges Land, das die Guten behindert, die Schlechten mästet und damit international zurückbleibt, während vor der Haustür, im Baltikum, in England und ganz besonders in Irland die Liberalisierung von allen Lebensbereichen zeigt, wie man es macht.