Regulators must tone down bank attacks to help recovery, says Sir John Gieve

By James Kwak The tragicomic events of the past few months—the London Whale (what are we up to now, $6 billion), Barclays-Libor, HSBC laundering money have prompted renewed interest in better, stronger regulation of the financial sector. Not that it’s going to go anywhere: it’s an election year, the Republicans have a blocking majority in the House and a blocking minority in the Senate, and they are only going to gain Senate seats in November.

OTTAWA — Bank of Canada chief Mark Carney said he is unlikely to raise interest rates until economic growth surpasses 2% and inflation quickens, adding that personal debt levels and the housing market will also influence the timing of his next move. The conditions for hiking rates are implied in the bank’s mandate to target 2% inflation, but Mr. Carney laid them out more bluntly than he has in the past in an interview with Global National Television that aired on Sunday.

Regulators have said European banks need to come up with additional capital. The amounts vary from 8 to 413 billion Euros.Anything less than 200 billion Euros (the IMF's proposed number) is preposterous. Given the rout in Italian bonds today and the gloomy outlook for Spain and Portugal, even 400 billion Euros is far too low.One Trillion Euros would not be surprising.