Basel Committee please, no more Mumbo-Jumbo, with Basel III you are going to hoo-doo us, even more than with Basel II

Basel Committee and Financial Stability Board: “Beware, beware, walk with care, care for what you do, or Mumbo-Jumbo is going to hoo-doo you, or Mumbo-Jumbo is going to hoo-doo you, boom le boom le boom le boom!”… and hoo-doo our banks, and hoo-doo us. Please we are NOT expendable!

And in case you wonder what Mumbo-Jumbo I refer to, please have a look at: 

“An Explanatory Note on the Basel II IRB Risk Weight Functions”, July 2005, Bank of International Settlements 

“A Risk-Factor Model Foundation for Ratings-Based Bank Capital Rules” by Michael B. Gordy a senior economist at the Board of Governors of the Federal Reserve System, October 22, 2002. 

And then consider that in those papers, which refer to the risk-weights that should determine different capital requirements for banks, there is not one word that shows any awareness of the fact that: if you allow a bank to leverage its equity more when lending to “The Infallible” than when lending to “The Risky”, you are introducing and odious discrimination and a completely senseless distortion that will make it impossible for banks to help the society to allocate efficiently economic resources.

PS. Here you can read more about what that mumbo jumbo entails