Sunday, December 8, 2013

Can you imagine regulator XXX, academician XXX or financial journalist XXX... to be so dumb?

Can you imagine regulator XXX, academician XXX or financial journalist XXX... sincerely believes that if banks hold capital based on how risky their assets seem to be, then they are safe, as if the problems with banks do not all arise from when banks do not identify how risky their assets are.

In other words how could regulators base the capital requirements for banks on the perceived risks of bank assets, and as if these perceptions were correct, when their troubles begin when the perceptions of risks turn out to be incorrect?

Aren't they dumb? It is just amazing how we have allowed our banks to fall into their hands.

If your handy man was driving in a screw with a hammer, would you not be allowed to call him dumb and not knowing what he was doing? If so why can I not call bank regulators dumb?

ECB's ex-FSB's Mario Draghi, why base bank capital requirements on perceived risk when the problem is when those perceptions are wrong?

Financial Stability Board’s Mark Carney, why base bank capital requirements on perceived risk when the problem is when those perceptions are wrong? 

Basel Committees’ Stefan Ingves, why base bank capital requirements on perceived risk when the problem is when those perceptions are wrong?