Why we need Regulation.

So today the Irish are finally admitting that they are in trouble and do need help from the European Union(EU) and the International Monetary Fund(IMF). Except that the problem is not really Ireland, but rather its banks.

Yes the EU and the Euro removed the flexibility and control on interest rates and currency value, but they didn't hold a gun to the bank's heads and force them to lend like crazy into a self-created real estate bubble which has now, as do all Ponzi schemes, gone sour.

Think of it. The two main Irish banks, Anglo Irish and Allied Irish have already received something like 30 billion Euros of Irish taxpayer money-and are still teetering. That's not surprising. According to the Bank for International Settlements (BIS) total lending of non-Irish banks to Irish banks is around $170 billion, or put another way that's the total borrowing by Irish banks from those banks.

Why did these banks lend to the Irish? Well the Irish banks were cheap, Irish government bonds were cheap (and as it turns out basically an investment in Irish banks) and the non-Irish banks were greedy. Again no gun was involved.

How greedy? And how irrational? British banks provided $42bn, German banks provided $46bn, US banks $25bn and French banks $21bn. And the British banks involved? 89.5% of the net assets of the Royal Bank of Scotland are held in Irish debt. 60.2% of Lloyd's Bank. But my favourite. 92.3% of Denmark's Danske Bank.

How is it that major banks are allowed to accumulate this kind of concentration risk?
And who are we really bailing out? Is it the Irish banks-or the British, American, French and German banks? At what point do we see a restructuring, and can it hit the people making the loans first (aka bankers), then the banks, then the senior bondholders and then and only then, the taxpayers please.