Enforcing moral hazard the Icelandic way (though Ireland may have better longer term prospects)…

There’s a good piece in the San Fran Chronicle which compares Iceland’s handling of the debt crisis favourably with the US’s. It doesn’t say it, but you might also compare it unfavourably with the Eurozone’s mishandling of its crisis too. Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges. Larus Welding, the former CEO of Glitnir Bank hf, once …

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Moral hazard is about behaviours not structures…

If you can get it, John Kay’s column in today’s FT is worth a peruse. Not least since he’s sounding a warning whistle that beefing up regulation is not the way to smarten the market or protect tax payers interests. In particular he sounds a note that will be familiar to those of us who witnessed the Irish government’s gung ho short cut to shoring up its banking sector: “It is sometimes tempting to think that guarantees that are not …

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