Of socks and men

I drive at 30mph if I’m in an urban zone. I don’t drive at 20mph which might be safer or 40mph which would be more dangerous. Effectively I let the government set a safe limit and I stick to it. I don’t exercise a great deal of judgment and, so far, the arrangement has worked well. I do, however keep my eyes open and slow down if it snows or if it’s school time and there are children about.
International regulators of banks have set up similar rules which govern lending practice and institutions such as Northern Rock have responded by delegating the decision, about how much to lend, to the regulators and have lent as much as they possibly could even if it meant handing out cash to people with poor credit histories using inadequate collateral as security. Operating at the limits regardless of conditions can be reckless if no judgment is exercised.
This is another downside to government intervention that has combined with excessive stability to produce the biggest bubble in money supply that we have seen so far.