Alice In Wonderland Academics-2

"After all, this is financial turmoil, not a systemic financial crisis. There has been no failure of a large complex financial institution, nor a widespread decline of asset prices. ... The growing role of large complex financial institutions may have made them 'too big to fail'--or conversely, 'too big to rescue.' It also raises the issue of regulatory capture. When financial institutions become very large ... their lobbying power increases significantly. This suggests a potential weakening of market discipline, which calls for greater disclosure. ... The wider distribution of risks within the global financial system offers many potential advantages", Richard Portes (RP) at http://www.voxeu.org/, 15 November.

RP, London Business School Professor, is another academic living in an alternate world. That no large financial institution failed means the regulators are protecting them. At least RP recognizes regulatory capture is possible. Look at Hank Paulson running interference for Citigroup. I see no advantage "to the wider distribution of risks", since it means large financial institutions will be able to pawn off their junk on the public. As to "a widespread decline of asset prices", huh? What is your numeraire? In euro and gold terms the US market has fallen! Disgareeing with the Professor, Helicopter Ben can print all the dollars he needs to protect Citigroup, et. al., no financial institution is "too big to rescue", the dollar is.