The US in particular was relied on as the world's consumer of last resort and its households leaned on rising house prices to borrow.
The argument is that a regulatory scheme can be captured by the monopolists it is supposed to control, and transformed into "a conspiracy against the public, [a] contrivance to raise prices," to borrow Adam Smith's words.
He was certainly in no mood to take any lip from Vince Cable, the Treasury spokesman for the Liberal Democrats, when he had the temerity to suggest in parliament that the only reason Britain appeared to be doing so well was that consumers were taking advantage of rising house prices to borrow as if there were no tomorrow.
Mortgages are traditionally provided by building societies in Germany and the rule of thumb has been for people to save a third of the purchase price and to borrow at fixed mortgages for up to 25 years.
Short sellers, traders who bet against a company's share price, are supposed to borrow shares and then sell them, leaving themselves in a position to profit if the share price falls.
That's the lowest level since May, but still a high price to pay to borrow until January.
These moves may have a far-reaching impact on the price banks pay to borrow, and thus on what they end up charging for credit.
"With these new obligations, you can leverage them more, because the market price allows you to borrow against them," Mr. Kaufman said.
At the peak of the housing bubble in 2007, the average interest rates it charged on mortgages were only about three-quarters of a percentage point higher than the price it paid to borrow.
The banks are waiting to learn the size of any fee they will be charged to benefit from the government's top-notch triple A rated guarantee that, theoretically, should reduce the price they pay to borrow money on the markets – either directly from other banks or buy issuing bonds.
