Edmund Phelps, Europe has not run out of ideas, it has run out of the will of trying these out… "it’s too damn risky”

Sir, I refer to Edmund Phelps, the 2006 Nobel laureate in Economics’, the director of the Center on Capitalism and Society at Columbia University’s “Europe is a continent that has run out of ideas” March 3. He argues Europe “needs to fight for an economic life worth living”. Indeed but perhaps it is not because a lack of ideas.

In Europe bank credit is one of the main sources for implementing ideas, and any continent which allows its banks to leverage more on what is “safe” than on what is perceived as “risky”, which means allowing its banks to obtain higher risk adjusted returns on equity on safe than on risky assets, is simply a continent that does not want ideas to be tried out, as new ideas quite often signify more risks.

Professor Phelps, in Europe, banks are refinancing the past and not financing the future.

Professor Phelps, I am sorry but I must inform you of the sad fact that the banks of the Western world have been castrated.