Unfortunately, with respect to believing the West decadent, it would seem Putin is right.

Edward Lucas of the Daily Mail suggests: “Putin believes the West is finished: overstretched, decadent and discredited. The truth is we are not losing this spate of arm-wrestles because we are weak, but because our willpower is weak.”

In terms of “decadent”, it seems Putin could unfortunately be right.

I say this because to impose larger equity requirements on banks when lending to “the risky” than when lending to “the safe” as the Basel Committee does; and thereby allow banks to earn higher risk-adjusted returns on equity when lending to the safe than when lending to the risky, is besides being something very dumb, a very clear sign of decadent risk aversion.

The Western world was built upon a lot of risk-taking, among others by its banks... but in 1988 it got hit by the Basel Accord asteroid.

Why is the President of the World Bank not informed about consequences of risk-weighted capital requirements for banks?

In Russia, September 6, 2013, Jim Yong Kim, the President of the World Bank Group, said the following in his statement issued at the end of the G20 summit.

“The G20 has pledged to achieve strong, sustainable, balanced and inclusive growth, and creating more and higher-quality jobs.”

Mr. Jim Yong Kim. As long as bank regulators allow banks to hold much much less capital when lending to "The Infallible", like some sovereigns, housing or the AAAristocracy; than what they are required to hold when lending to “The Risky”, like medium and small businesses, entrepreneurs and start-ups; and which means the banks will earn much much higher risk-adjusted returns on their equity when lending to the former than when lending to the latter... "strong, sustainable, balanced and inclusive growth" able to create more and higher-quality jobs” will just not happen. 

The odious and dangerous discrimination of "The Risky" does only increase, not reduce, the gap between those perceived as safe, the past, the developed, the haves, and those perceived as “risky”, the future, the developing, the have nots.

And the truly sad thing is that no one in the world’s premier development bank wants to inform its president about it.

Mr. Jim Yong Kim. I assure you, risk-taking is the oxygen of development. God make us daring!

Per Kurowski

A former Executive Director of the World Bank, 2002-2004