August 15, 2007 (LPAC)--The Paris bureau of EIR news service reported that French economist Jacques Attali attacked the deregulation of banking and financial sectors over recent years, as central to the current banking crisis.

Interviewed by the French daily Libération, the former advisor to President François Mitterrand called for immediate regulatory and transparency measures, because "Nobody knows who owns what and who owes money to whom!" Attali said that "this crisis reveals to the world a situation that many observers have believed untenable for a long time. The essential point is the fact that the United States ... no longer has savings and is entirely financing its public and private investments by lending policies" which are "accelerating the deindustrialization of the country. The traditional activities have given way to finance, simply because industry did not offer the sufficient profits for a growing financial system, excessive and unchecked. As a result, the U.S. economy is pushed towards ever more speculative and risky investments, such as real estate.

What we see now is a jolt--and certainly not the final collapse--of the casino economy." But, said Attali, "Should the markets start to turn, as now in real estate, and it's the whole system that threatens to collapse."

On immediate government regulatory measures over the banking system, Attali said, "The banks, as fast as they can, get rid of their loans by reselling them to less scrupulous players.... The banks, the funds of all kinds, the firms, no one knows any more to whom they owe money and from whom they can make claims. It's total chaos and logically, nobody controls anything. Emergency action would be to impose immediate transparency on the proprietor of each claim." He added that each financial center has been competing to remove regulations on banking and finance, in order to "attract investors."

Attali stresses, of the current bank panic, "By injecting liquidity, the central banks for the moment only made the patient worse, not taken care of him."