Is being consistent better than being right? Is the quest for consistency not just a cover up for mediocrity?

We read: “The members of the Financial Stability Board´s Regional Consultative Group for Europe were updated by the Basel Committee on Banking Supervision on the findings of the regulatory consistency assessment of risk-weighted assets for market risk and credit risk in banks’ portfolios, and shared national perspectives on regulatory consistency of risk weights.”

Of course we like consistency, but what is more important, that all these European countries are consistent in their assessment of risk-weighted assets for market risk and credit risk in banks’ portfolios, or that some in the group, could get it right, even if this meant acting inconsistently?

Has the biodiversity of opinions no longer any value? Is this quest for consistency not just a cover up for mediocrity?

But when will Europe debate “Regulatory Abuse of Market Regulation”?

In Europe the European Parliament, and others related, are debating a “Market Abuse Regulation”. That is OK, though I must wonder about when they will begin debating “Regulatory Abuse of Market Regulation”?

Allowing banks to hold much less capital when lending to “The Infallible” than when lending to “The Risky”, as Basel II and III regulations do, allow banks to earn much higher expected risk-adjusted return on their equity when lending to the AAAristocracy than when lending for instance to small- and medium-sized enterprises… and that, as anyone should be able to understand, is as abusive to the market as can be!

Ask the regulators!