Wednesday, July 16, 2008

Credit in the Eurozone

Guillermo de la Dehesa reports that credit in the Eurozone has not become dearer and that the rate of lending is slowing only slightly. Is this comparatively better performance of the European credit markets compared with the US only temporary, or does it reflect real differences in American and European lending practices, regulatory environments, and exposure? Dehesa gives only a few preliminary indications of answers to these questions, but it will be important to learn more as US regulators contemplate new banking regulations in the United States. If European bankers did indeed behave more sanely than American bankers, was it--so to speak--because of better upbringing or sterner parents?

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