Resumen de PIRG doldrums: exit via overrecapitalization
The laggards of the Eurozone pose a novel economic and legal issue. Whereas the Eurozone sorely needs growth in the PIRGS, neither conventional Keynesian stimulus nor devaluations are likely to be productive. This essay proposes that growth be rekindled by forced over-recapitalization of the laggards’ private banks. This will generate local growth while circumventing inefficient national governments and without starting an inflation spiral or additional bureaucracy. The proposal is sensitive to the Eurozone’s attitudes about federalism of financial regulation, to help which the paper juxtaposes the development of US bank regulation.
