State intervention in the markets will always end in tears

Sir, Your “Surging house prices test regulator’s new weaponry” report (May 6) is highly instructive, although perhaps not exactly as it intended. It exemplifies how each state intervention must call forth a new intervention, as in this instance, central bank-manipulated zero interest rates result in multiple house price booms, which then demand further regulations as attempted controls. And an expert says on the new interventions, “there is a risk that regulators end up making policy mistakes.” It is a certainty that regulators will make mistakes, given the uncertainty and unknowability of the financial future. These mistakes will lead to more problems, new political calls for more regulation, and then further interventions, and so ad infinitum.

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