14 September 2007

Mediocracy in banking: the mess spreads

Further to this, the current credit crisis is still expanding rather than contracting. The commercial paper problem has not gone away. There is something odd going on with German banks. And now we have the first British bail-out: Northern Rock.

As Willem Buiter writes,

It is clear that the conditions for a justifiable bail out ... were not satisfied. ... I can only conclude that the Bank of England is a paper tiger. It talks the ‘no bail out’ talk, but it does not walk the walk.

Talking the talk, but not walking the walk. Also known as 'style over substance', or 'appearance over content'. A key characteristic of mediocracy.