Monday DeLong Smackdown: Alan Kirman on Self-Fulfilling Financial Crises

Per Kurowski: Self-Fulfilling Financial Crises: "The risk weighted capital requirements for banks guarantee: 1. Especially large exposures to what’s perceived as especially safe, against especially little capital, which dooms or bank system to especially severe crises. 2. Especially low exposures to what is perceived as risky, like loans to entrepreneurs and SMEs, which dooms our economy to weakness and not being able to reach its potential. And that has yet not even been discussed, much less learned