The Financial Times Lex column:
The European Central Bank might have called it “fine-tuning” but its decision to inject nearly €95bn into the eurozone banking system, the largest such intervention since the September 11 2001 attacks, is anything but. ...How could lending standards have deteriorated? Easy, in a culture where old-fashioned bourgeois ethics — such as deciding responsibly for yourself what is the right thing to do — are no longer fashionable. Instead, the criterion is: if your peers are doing it, or if a committee of 'experts' decides it's okay, it must be okay.
The real question ... is not what the ECB knows, but what the 49 banks participating in Thursday’s operation know — or fear. In a few cases they may have been suddenly keen for cash in anticipation of their own losses. Most, however, may have simply anticipated losses somewhere else in the system. ... the fact that banks could suffer such a collective loss of nerve says a huge amount about their own view of how far lending standards and transparency have deteriorated.
And how about 'transparency'? Transparency, as practised in a mediocracy, is a mechanistic way of trying to compensate for the fact that people are liable to behave less responsibly. However: (a) it can't compensate, because it wrongly assumes that the (dumbed down) audience will use the data thoughtfully, rather than just assuming the 'experts' have got it right, (b) it is largely phoney, because the data given out is often doctored and manipulated, making things worse than if it wasn't given out in the first place.