Why, why, why? What is this Basel Committee bank regulation lunacy?

What if the Department of Education ordered that all teachers who were teaching those perceived as brighter should receive a substantial bonus, not payable to those teaching those perceived as less intelligent?

And I ask that because something like that it is precisely what the bank regulators of the Basel Committee do when they allow banks, doing normal banking business, to earn a much higher risk adjusted return on their equity when lending to “The Infallible”, like to the AAAristocracy, than when lending to “The Risky”, like to small businesses and entrepreneurs. Tell me what lunacy is this?

And I ask that because those regulations translates into “The Infallible” having even more access to bank credit at even lower interest rates, and “The Risky”, having even less access to bank credit at even higher rates.

And I ask that because no major bank crises ever has resulted from excessive exposures to “The Risky” they have all, no exceptions, resulted from excessive exposures to what was erroneously thought as belonging to “The Infallible”.

And I ask that, because our real economy did not get prosperous, nor did we get our jobs when young, by the banks lending solely to “The Infallible”. We need our banks to lend to “The Risky”, with reasoned audacity.