Community bankers in order to defend themselves should start by defending their more typical borrowers.

There is no reason on earth why banks should need to hold larger capital requirements when lending to those perceived as “risky”, namely the medium and small businesses, the entrepreneurs and the start-ups, that when lending to “The Infallible”, the AAAristocracy. That only discriminates against the borrowers more typical of the community banks… which besides have never ever caused a major bank crisis. Only the false “absolutely safes” have.

Community bankers need to realize that no matter how much they might like low capital requirements, in the long run these, when based on risk perceptions, will always favor the larger banks, which have more readily access to the “absolutely safe”, or can more readily access the tools needed to construe “absolutely safe” images.