David Leonhardt has a superficial but interesting piece on the Germany's relative economic success over the last couple of years. There is one sentence that I take issue with and think is a bit misleading:
"That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent."
First I would question the wisdom of requiring such a large down payment almost as much as enabling such low down payments as we see in the US. I don't know that society is necessarily bettered by actively discouraging home ownership. I believe governments position should be neutral but look to ensure that banks are not taking imprudent risks. At some point everyone would like to stop working and you will need shelter, not having to pay rent seems like one way to ensure an adequate retirement. In the absence of home ownership my guess is there is probably a need for higher state pensions. But that aside, it does appear that German and European regulators were very much asleep at the switch. While they did not allow German banks to lower their credit standards for German homebuyers (quite the opposite as documented above), German regulators apparently had little problem with DeutscheBank and other German banks accumulating as many bad risks on their balance sheet at considerable leverage.
What interested me also was any lack of reference to the German Kurzarbeit scheme which seems to have blunted layoffs. If you look at mass layoffs I think there are two ways to approach them (that is preventing them). The first would be to see the primary goal as propping up consumption so firms might hold off on cutting their workforce. Alternatively you can attempt to make the cost of labor cheaper. I think Kurzarbeit is very social democratic gloss on the latter. In the US the most direct and obvious way to have cut the costs of employment would have been to cut the employer portion of Social Security.