Chinese Regulators Tell Banks to Stop Lending to US Banks

That can't be good. I mean the bastion of free market enterprise and financial innovation being treated as an outcast?

• Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
• The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
• "The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

Ah, what all those financial wizards with PhDs and MBAs from Ivy Leagues have created for us with their "innovations"; combined with a regulatory agencies ripped at the seams since it would "hurt our competitiveness" to actually have watchdogs who "stifle" our brighest minds. It is amazing to watch 30 years of orthodoxy melt before our eyes. I wonder what Phil Gramm and Alan Greenspan are thinking today as they watch this unfold.

Remember the quote of the century [Oct 21: Ironic Quote of the Month? Year? Decade?]

Emerging markets are being favored in part because "financial innovations are less common in developing countries," said Heidemarie Wieczorek-Zeul, German economics minister, in remarks to the IMF/World Bank Development Committee.