Thursday, March 16, 2017
We now have risk weighted capital requirements for banks, more risk more capital, which clearly discriminates against the access to bank credit of those perceived as risky. That even when what is perceived as risky has never ever caused a major bank crisis; in terms of risk perceptions, that dishonor has always fallen on those ex ante perceived as very safe.
And so SMEs and entrepreneurs have much less access to bank credit, that is unless they are willing to pay much higher risk premiums. And so our economies are provided with much less of that oxygen that risk-taking signifies to its development.
And yet the world keeps mum on it.
I wonder what hullaballoo it would raise if instead those capital requirements were gender or race based?
I ask because when it comes down to odious discrimination it all seems the same.