The Basel Committee's Bank Stability Decree (scary eh?)

"WE THE BANK REGULATORS believe that even though those who are perceived as risky, like the medium and small businesses, the entrepreneurs and start-ups, already have to pay higher risk premiums and get smaller loans than those perceived as absolutely safe, that does not suffice in order to keep our banks safe. 

And so we, the Basel Committee for Banking Supervision, with full and enthusiastic support of the Financial Stability Board, in order to guarantee the stability of all our banks, and so that these do not pose a threat to our economies, decree the following: 

To make absolutely sure banks do not lend to the risky, we allow banks to hold much much less capital (meaning equity) against exposures to the infallible, like good sovereigns, housing finance and members of the AAAristocracy.

Brief explanation: That should permit banks to obtain much much higher risk adjusted returns on their equity when lending to the infallible than when lending to the risky and, being bankers greedy, that should take care of it! And so sorry if that kills equal opportunities and drives inequality, but, as they say, you can't have the cake and eat it too.

Note: To those wondering about how this regulation might distort the allocation of bank credit to the real economy, perhaps so much that in the medium and long term it could even cause great dangers for the stability of banks, we remind them that is of no concern to us bank regulators… and besides… après nous le deluge! is our motto."

(And here is my own ps. to bank regulators: Never forget that risk-taking, and blissful-ignorance, are two prime drivers of economic growth and development and that, without these, our world will stall and fall.)