Do bank regulators really believe ordinary bankers to be so stupid, or are they really so stupid themselves?

As in Basel II, do bank regulators believe ordinary bankers to be so blind and dumb, so they need to require them to hold 5 times as much capital when they lend to someone they know has a BBB+ to a BB- rating, or no rating at all, than when they lend to someone they know has an AAA to AA rating? Do they not know this will distort the allocation of bank credit to the real economy? Do they not know this means those with BBB+ to BB- ratings, or no ratings at all, will get much too little bank credit?

Or, as in Basel II, are bank regulators so dumb so as to believe ordinary bankers when they argue they should need only to hold a fifth of capital when lending to someone who has an AAA to AA rating, than what they are required to hold when lending to someone with a BBB+ to BB- rating, or no rating at all? Do they not know this will distort the allocation of bank credit to the real economy? Do they not know this will mean those with AAA to AA ratings will get much too much bank credit?