Financial Stability Board, and Basel Committee, stop insulting our intelligence

The Financial Stability Board in its Peer Review on Risk Governance of February 12 states: 

“The recent global financial crisis exposed a number of risk governance weaknesses in major financial institutions, relating to the roles and responsibilities of corporate boards of directors (the “board”), the firm-wide risk management function, and the independent assessment of risk governance. Without the appropriate checks and balances provided by the board and these functions, a culture of excessive risk-taking and leverage was allowed to permeate in many of these firms.” 

Have these regulators no shame? They know perfectly well that it was they who intruded on the risk management functions of banks by imposing distorting differentiated capital requirements based on perceived risk, and authorized the excessive leverage to what was perceived as absolutely not risky, like to AAA to AA rated securities and sovereigns like Greece. 

The review sets out among its recommendations: “National authorities should strengthen their regulatory and supervisory guidance for financial institutions and devote adequate resources to assess the effectiveness of risk governance frameworks.” 

Forget it! Our problem is not with our national authorities, our problem is with YOU, Financial Stability Board and Basel Committee. 

Regulators go home and please stop insulting our intelligence, as is you’ve done enough damage.