Lagarde's Progress

Liam Halligan has a good piece in the Telegraph today in which he praises the new head of the IMF Christine Lagarde for having stated the other day that banks need urgent recapitalisation but castigates her for not going on to spell out what needs to be down to sort out the problem the Western banks are in. He doubts that she knows. Halligan believes that the only way to fix the banks' problems is for them to be forced to disclose all their losses and that they will then have to be recapitalised by the taxpayers as it is now too late for private investors to do so. Furthermore Halligan believes that the banks must be made to  restructure as a quid pro quo and that such restructuring involve writing off loans and forcing investors to take haircuts. The other big problem Halligan mentions is the euro straitjacket and he wonders whether Lagarde understands that the euro is economically incoherent and doubts that she has the economic understanding to lead the IMF. The failure of our leaders to sort out this mess of their making has just gone to show that all the spin, all the hype put about by or on behalf of politicians to make us believe they are supermen was a load of old cobblers. One has to say though that Cameron seems to have recognised this and although the government does still spin things it is is somehow at a much lower level and within acceptable bounds.