November 26, 2008

Governments would do better stopping the regulators from bullying the bankers than joining the party.

Sir John Kay hold that “A passive approach to bank stakes is inadequate” November 26. I agree but before we have our governments start using their bail-out investment’s to start bossing the banks around we should request the governments to first remove the disincentives the government has created to keep the banks from doing what they should do namely taking on productive risks.

I just wish that all of the columnists of the Financial Times took some time off to read what the minimum capital requirements created by the Basel Committee are all about. They are in fact the most important regulatory aspect that concerns our banks. You can find them in: http://www.bis.org/publ/bcbs128b.pdf