And what about some more flexible Basel limits?

Sir Peter Thai Larsen reports that “Basel outlines stricter limits”, November 21, but that one official said “We’re not going to jack up all the minimum capital requirements in the middle of a crisis”. Phew... what a relief? Even though just talking about it cannot make the urgent task of raising new equity for the banks any easier.

But what about lowering some of the minimum capital requirements in the middle of a crisis? Especially considering that these capital requirements did not turn out too low for the risks they were supposed to cover, but ended up way too low only because the risks were lousily measured by the risk surveyors appointed by the Basel Committee.