This is what markets DON’T want to hear

The last thing markets want to hear is that some government bureaucrat wants the banks to pursue this or that social policy goal in return for the use of the government’s capital. A Reuters headline suggests their worst nightmares may be happening:

UK Treasury Min Cooper: Extra capital should be used to support priority lending in the UK.

Who’s priority? How about the goal of homeownership? That’s a social good. Let’s give loans to low and no income borrowers. What? There was a problem with that? Oh never mind…