July 24, 2009

What are we doing to save ourselves from subprime financial regulators in Basel?

Sir Prof Lawrence J. White in “No monopoly on credit wisdom” July 24 writes “Credit wisdom is not located solely in Moody’s Standard & Poor’s and Fitch”. He is of course absolutely right, though the real question are: Should not our financial regulators have known that before they sent the market on a wild and crazy AAA chase guided by just three credit rating agencies? How unwise can we allow our financial regulators to be?

Frankly we did not need this crisis to know that and let me remind you that on January, 12, 2003, the Financial Times published a letter I wrote and that ended with “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic error to be propagated at modern speeds. Friends, please consider that the world is tough enough as it is.”

What are we doing in order to save ourselves from a new cull of subprime financial regulators in Basel? Not much, if anything at all.