Europe’s pain must be widely shared

Raghuram Rajan, professor of finance at the University of Chicago’s Booth School, Financial Times, December 6, 2011:

Citizens across Europe, whether in rescued countries or rescuing countries, will be paying for years for a mess that no one feels they are responsible for.

Banks may not all have voluntarily loaded up on distressed government bonds – some were pressured by supervisors, others by governments – but many have made unwise bets. 

If they are seen as profiting unduly from the rescue, even as they return to their bad old ways of paying for non-performance, they will undermine political support for the rescue, and perhaps even for capitalism.
 
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