Neoliberalism’s history is not being correctly recorded

The two policies most mentioned in connection with neoliberalism (please google it) are “privatization”, referring to that the private sector knows better, and “deregulation”, referring to that it's better when the government interferes less. And one of the moments most mentioned about when neoliberalism crumbled, is the 2008 global financial crisis GFC.

But, in 1988, with Basel I, bank capital requirements changed from one single capital requirement e.g., 10 percent against all assets, to multiple risk weighted requirements, and with its most defining weights being 0% the government, 100% citizens. Basel III, the short version, contains 1626 pages.

So, banks being allowed to leverage more their capital... meaning making it easier for banks to earn higher risk adjusted returns on equity with government debt than with loans to e.g., small businesses and entrepreneurs, please, what has that to do with the private sector knowing better what to do than the public sector?

So, deregulation, please, has that not much more to do with putting regulations (with all its possible miss-regulations) in overdrive?

And please, would there ever have been a 2008 GFC if banks had been limited to leverage their equity 10 times with AAA to AA rated mortgage-backed securities, and not the 62.5 times European banks and US investment banks 2004’s Basel II allowed them to do?

Does arguing this make me defender of neoliberalism? No and Yes! 

I often identified the privatizations, for instance of utilities, as just a trick by the bureaucrats in turn to lay their hands on some easy fiscal revenues, which would later have to be repaid by us consumers through higher tariffs.

But, do I believe that small businesses and entrepreneurs know better what to do with bank credit than the bureaucrats not personally responsible for the repayment of it do? You bet!

Has the end of neoliberalism in 1988 been recorded for the history books? No! There's surely many who even swear it is still alive and kicking.

PS. You don't have to just take my word on it: “Assets for which bank capital requirements were nonexistent, were what had most political support: sovereign credits. A simple ‘leverage ratio’ discouraged holdings of low-return government securities” Paul Volcker