How long have you got? I'm sure that you already know it's nowhere near as simple as that and not nearly so suited to gross generalisations. Nick would be the person to ask but only if you have a couple of free hours...
Basically, people are being irrational in response to a threat to profits of unknown magnitude. In addition, this threat to profits is causing banks to hunker down and hold onto their cash - if banks won't lend to each other, the oil that greases the wheels is gone and things seize up.
And before you say government should "do" something - someone at work likened monetary policy to throwing depth charges in the ocean until a dead whale floats to the surface. It's a bit of a blunt tool. As an example, the central banks release more short term funding - which should help - but people either take it as a sign that things were much worse than they thought, or the stigma attached to having to take funding from central banks means they either borrow and pay the price (e.g.: Northern Crock) or they don't borrow and pay the price.
And we cannot legislate against foolishness, nor should we - the value of your investment may go down as well as up, past performance is not a guide to future performance - do people not listen to the warnings? And who was being foolish - the banks lending the money to people who can only sign with an x, or those who were borrowing?
People generally do not "escape" to the private sector - in many cases, they couldn't get a job in the private sector due to being less good than their peers, so ended up in regulatory bodies. This generally does not lead to private sector employment at some point in the future. The private sector remains compliant in the face of ever-moving goalposts through fear of fines, not through hiring ex-regulators.
Re: Rubbish, my dear
Basically, people are being irrational in response to a threat to profits of unknown magnitude. In addition, this threat to profits is causing banks to hunker down and hold onto their cash - if banks won't lend to each other, the oil that greases the wheels is gone and things seize up.
And before you say government should "do" something - someone at work likened monetary policy to throwing depth charges in the ocean until a dead whale floats to the surface. It's a bit of a blunt tool. As an example, the central banks release more short term funding - which should help - but people either take it as a sign that things were much worse than they thought, or the stigma attached to having to take funding from central banks means they either borrow and pay the price (e.g.: Northern Crock) or they don't borrow and pay the price.
And we cannot legislate against foolishness, nor should we - the value of your investment may go down as well as up, past performance is not a guide to future performance - do people not listen to the warnings? And who was being foolish - the banks lending the money to people who can only sign with an x, or those who were borrowing?
People generally do not "escape" to the private sector - in many cases, they couldn't get a job in the private sector due to being less good than their peers, so ended up in regulatory bodies. This generally does not lead to private sector employment at some point in the future. The private sector remains compliant in the face of ever-moving goalposts through fear of fines, not through hiring ex-regulators.