What are we to do with immoral and dumb dumb bank regulators?

Current bank regulators, with the Basel Accord of 1988, and further with their Basel II in 2004, decided to concoct and impose credit-risk weighted requirements for banks…more-risk-more-equity and less risk-less-equity.

That results in that bank can leverage more, and therefore obtain higher risk adjusted returns on their equity, and on the implicit and explicit support of taxpayers, when lending to “the safe” than when lending to “the risky”.

That constitutes a regulatory bias in favor of those who already are favored by bankers because they are perceived as safe, which results in an immoral and odious discrimination against “the risky”, those who are already naturally discriminated against by bankers.

And it is dumb because that distorts the allocation of bank credit to that real economy on which our pensions, our children and grandchildren’s future, and even our banks long-term safety depends upon.

And it is also dumb because never ever have major bank crisis resulted from excessive exposures to what was ex ante perceived as risky, these have all resulted from excessive exposures to what was ex ante perceived as safe but that ex post turned out to be very risky.

So what are we to do with these immoral and dumb dumb bank regulators? The Basel Committee and the Financial Stability Board, they don't even acknowledge that there is a problem.

PS. By the way, what are regulators really doing when they assign a zero risk weight to the government and a 100 percent risk weight to an unrated citizen? Does that not give out a very strong stench of communism?