【正文】 authorities. Now that the investment banks know the central banks will stand behind them, they also need closer scrutiny and higher capital standards. For the moment supervisors need monitor only what banks lend hedge funds, but you could imagine some hedge funds being so central to the system that they too need direct attention. The second change in philosophy is to bully banks to build buffers when times are good so they have stronger defences when times are bad. The system has e to amplify the extremes of the cycle. Fairvalue accounting, which pegs assets to current market prices rather than their historic value, leads to downward (and upward) spirals in asset prices, and hence leverage. Banks39。me Kerviel, accused of losing Soci233。s president demanded that the ―monster‖ of financial markets ―be put back in its place‖: bankers had caused a ―massive destruction of assets‖. The critics do not lack ammunition. The lapses in creditunderwriting in the subprimemortgage market hardly reflect a wise allocation of capital. The opacity of the shadow banking system and the mindboggling plexity of those toxic assetbacked products have raised doubts about the discipline of the market. Forever blowing bubbles Be careful. It is not just that a rush to regulate is seldom wise: witness SarbanesOxley, the governance act hurried through in the wake of the corporate scandals earlier this decade. The current assault is dangerous because it mixes a number of small truths with a big, alluring myth. The fiddly verities concern the ways in which finance can indeed be made a bit more efficient or fairer. But you can make those changes only if you dismiss the myth: that finance can somehow be stripped of its failures and perfected. Bubbles, excess and calamity are part of the package of Western finance. And still it is worth it. Some change is desirable and inevitable. Most of it will be supplied, belatedly, by the market itself—especially if it is bathed in the cleansing sunlight of transparency. America39。s Terminal 5, which endured a chaotic opening that led to hundreds of flight cancellations. His replacement is Mike Brown, chief operating officer of London Underground, another anisation in which passengers have a few quibbles about the service. KAL39。s. 4 On the road With the price of oil hurtling towards $130 a barrel, the cost of petrol in America crept ever higher just before the start of the summer driving season, which begins on Memorial Day (the last Monday in May). Meanwhile, the International Energy Agency again cut its forecast for the growth in demand for oil this year, causing analysts to ponder whether rising oil prices would cause global energy consumption to fall. See article Canada39。s largest bank by market value, Westpac agreed to merge with St Gee, paying A$ billion ($ billion) for its smaller rival. The decision by Yahoo! to reject Microsoft39。s largest bond insurer, reported a $ billion quarterly loss and took writedowns of $ billion。s greenhousegas emissions, putting more distance between himself and Gee Bush. See article AFP 3 The Republicans lost another congressional seat in a special election, this time in north Mississippi. The party had made every effort to stop the district from falling to the Democrats, including flying in Dick Cheney to stump for their candidate. The Republicans have lost three seats so far this year to the Democrats in oncesolid ―red‖ districts. America39。s troubled Darfur region, apparently backed by neighbouring Chad, was fended off after attacking Omdurman, a suburb of Sudan39。s president, Evo Morales, set August 10th as the date for a referendum that will decide whether he and the country39。s party in Islamabad. See article Japan39。 1 Politics this week May 15th 2020 From The Economist print edition China suffered its biggest natural disaster for 30 years when an earthquake devastated Sichuan province killing some 50,000 people, according to official estimates. President Hu Jintao ordered an allout rescue effort and the prime minister, Wen Jiabao, flew to the region to supervise it. See article In contrast, Myanmar39。s party pulling out of its partnership with Asif Zardari39。s poor level of data protection. Bolivia39。s embattled prime minister, cut ine tax for 20m people to fend off a backbench revolt over the scrapping of a lower 10p rate. Mr Brown also set out his legislative programme, but against the backdrop of a weakening economy. See article The potential for violence Lebanon was racked by fighting across the country after its beleaguered proWestern government tried to sack the head of airport security and to dismantle the munications work of Hizbullah, a Shia partycummilitia. Hizbullah reacted by briefly capturing the centre of Beirut, the capital, and the television station of the main Sunni party. The Saudi foreign minister accused Iran, which helps Hizbullah, of ―backing a coup‖. See article A motorised rebel force more than 1,000strong from Sudan39。s lack of support among bluecollar voters. But the party began to unite behind Mr Obama and he secured the endorsement of John Edwards, who pulled out of the presidential race in January. See article John McCain was also out on the trail. He made a big speech on climate change and called for limits on America39。s list of casualties in the subprimeloans crisis, MBIA, the world39。 and Freddie Mac, a governmentbacked housingfinance pany, posted its third consecutive quarterly loss and unveiled a plan to raise $ billion in new capital. Property crash The slump in American house prices will continue until at least next year, according to HSBC, which holds a sizeable portfolio of subprime loans and is thus seen as a good guide to where the market is heading. In a deal that creates Australia39。s News Corporatio