But with questions that shall not to be heard, courage might not suffice
“A lot of people want to convince you that you need a Ph.D. or a law degree or dozens of hours of free time to read dense texts about critical theory to understand the woke movement and its worldview. You do not. You simply need to believe your own eyes and ears.”
So begins Bari Weiss’ “We Got Here Because of Cowardice. We Get Out With Courage… Say no to the Woke Revolution”
Indeed:
We should need nothing of that sort in order to understand that… risk weighted bank capital requirements based on that what’s perceived as risky is more dangerous to our bank systems than what’s perceived as safe, is as wrong/as woke as can be.
2004, Basel II assigned to the safest of the perceived safe, a risk weight of 20% and, to the riskiest of the perceived risky, a risk weight of 150%... Translating into a Basel II capital requirement of 1.6.% for the safest and 12% for the riskiest... Meaning banks were allowed by their regulators to leverage their capital 62.5 with assets some few human fallible credit rating agencies consider to be the safest, and 8.3 times with what these agencies consider to be the riskiest.
Should we really agree with that those excessive exposures that could become risky for bank systems are more built up with assets rated below BB- than with assets rated AAA? Does it not suffice to remember the 2008 global financial crisis?
We should need nothing of that sort in order to understand that… decreed risk weights of 0% the government and 100% citizens, de facto implies that bureaucrats know better what to do with credit for which repayment they’re not personally responsible for than e.g., small businesses and entrepreneurs.
Should we agree with such statism/communism/fascism?
We should need nothing of that sort in order to understand that… allowing banks to leverage more their capital with some assets than others, make it easier for them to obtain a higher risk adjusted return on equity with some assets than with other.
Should we agree with such in distortion of the allocation of bank credit?
We should need nothing of that sort in order to understand that… those less creditworthy already get less credit and pay higher interest rates.
Should we agree with bank regulations that declare the less creditworthy to also be less worthy of credit?
We should need nothing of that sort in order to understand that… … and on this issue I could go on and on… like wondering why the Academia says nothing. Might it be an Inquisition has declared questions on this issue shall not be heard?
PS. My 1999 Op-Ed in which, like Bari Weiss, I quote Arthur Koestler. “I automatically learned to classify all that is repugnant as an »inheritance from the past», and all that is attractive as the »seed of the future». With the aid of this automatic classification it was still possible for a European in 1932 to visit Russia and continue to be a communist.”
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