Halleleujiah

Somebody had to say it:

I note with consternation Europeans’ obsession with regulating hedge funds and tax havens. Did they cause this crisis? No. Europeans also call for regulation of all markets, products and participants, without exception. This is like calling for research into radar while the Titanic sinks. Do they realise that the systemically significant banks at the heart of this crisis are the most regulated institutions we possess? Let us not be diverted from today’s priorities.

Our problem was emphatically not too much regulation, but bad regulation. We may have seen some hedge funds blow up last year, and we may see much of private equity disintegrate in 2009, but we should try to remember that while those guys may not have been regulated, the folks that stuffed them full of leverage were.