Growth requires a willingness to take risks!

Sir Martin Wolf holds like most would do that “Growth is the fix for British Finances” April 16. To that effect he mentions among other, the interesting possibility of ending interest deductibility, though that could create some serious transition problems while markets adapt such a dramatic change.

But what he does not mention is the need to completely overhaul the current bank regulations. These regulations, by means of allowing special and low capital requirements for banks when involved with anything related to an AAA rating, benefits what already benefits from being perceived as having low risks. In doing so, the regulations quite explicitly discriminate against the risk-taking that is required to achieve what Wolf wants, namely growth, promotion of exports and a healthy manufacturing sector.