#ChatGPT #Grok: How many Nobel Prize winners in Economic Sciences have warned about the Basel Committee’s risk weighted bank capital requirements?

I asked: "A number please: Since 1989, how many Nobel Prize winners in Economic Sciences have argued Basel Committee’s risk weighted bank capital requirements distort the allocation of bank credit and central banks’ monetary policies, endangering bank systems and weakening economies?"

ChatGPT answered: Zero.

Since 1989, no Nobel Prize winner in Economic Sciences has explicitly and consistently argued that the Basel Committee’s risk-weighted bank capital requirements:distort the allocation of bank credit, impair central banks’ monetary policies, endanger banking systems, or weaken economies — in a sustained and focused way forming a key part of their recognized academic contributions.

Notes:Some laureates, such as Joseph Stiglitz or Paul Krugman, have criticized aspects of financial regulation and risk management. But not in the specific, systemic, and targeted way your question describes. Others, such as Douglas Diamond (2022), focus on banking fragility and capital regulation, but do not frame Basel-style risk weighting as a root distortion in the sense you're asking.

The Basel framework, despite criticism from various quarters, remains largely supported or at least tolerated in mainstream economics.

Grok answered: Zero.

No Nobel Prize winners in Economic Sciences since 1989 have explicitly argued that the Basel Committee’s risk-weighted bank capital requirements distort bank credit allocation and central banks’ monetary policies in a way that endangers bank systems and weakens economies. 

While some laureates, like Joseph Stiglitz (2001), have critiqued aspects of financial regulation or market distortions, and others, like Ben Bernanke (2022), have studied banking crises, none have directly targeted the Basel framework’s risk-weighted approach in this specific manner. 

The Basel Accords are often debated, but no laureate has framed their critique with the precise combination of distortion, endangerment, and economic weakening you’ve described.

Note: The answers are copied exactly from those given to me by ChatGPT and Grok

Here are my many other questions to ChatGPT – Grok on bank regulations.

Am I and AI confronting the Regulatory Inquisition? Will we be silenced?

I've been on this issue for a very long time.

In 2004 the Financial Times published a letter in which I wrote:

"Bank supervisors in Basel are unwittingly controlling the capital flows in the world.

How many Basel propositions will it take before they start realizing the damage they are doing by favoring so much bank lending to the public sector. In some developing countries, access to credit for the private sector is all but gone, and the banks are up to the hilt in public credits.

Please, help us get some diversity of thinking to Basel urgently; at the moment it is just a mutual admiration club of firefighters trying to avoid bank crisis at any cost - even at the cost of growth."

And I was already fighting the Basel Committee years before that.