Red Light, Green Light: Should We Deregulate The Banks For Our Own Safety?

One of the more amusing things about the dynamics that fed the Eurozone sovereign debt crisis was the extent to which banks found themselves caught in a kind of vicious, self-feeding loop involving debt issued by their sovereigns. The problem was that as the crisis worsened, banks became the only willing buyers of their sovereigns' bonds. If you're a bank with large holdings of government debt, you don't want to not buy more, because when there's a dearth of natural buyers, you need to step in