They accordingly allowed banks to gear up their balance-sheets to a greater extent than before.

ECONOMIST: Economies need derivatives, but reform is justified

And Mr Kahneman cites studies that show how overoptimistic chief executives (as measured by the amount of stock they own) were more likely to gear up their balance-sheets and pay too much for acquisitions.

ECONOMIST: Sometimes it helps if investors are gloomy

It will be interesting to see if European banks will, indeed can keep the money creation process in gear in the absence of further ECB balance sheet growth.

FORBES: Monetary Watch, Euro True Money Supply