Beware of Gameboy type regulations.

Sir you hold that “Basel must not yield to pressure” when imposing more stringent capital requirements for banks because “even if the rules do compromise economic growth in the short run, it is a price worth paying for more stable growth in the long run.” July 24.

You have not yet understood this crisis. More than just being low it was the fact that the capital requirements discriminated in favor of what was perceived as risk free which set of the dangerous stampede after triple-A rated operations which got them and us into this mess. There is absolutely nothing in the refinements that Basel is now doing in chapter III of their paradigm that will guarantee a more stable growth in the long run... much the contrary.

Can’t you see it? Our banking regulations have fallen into the hands of a first generation of Nintendo-Gameboy-players’ type of regulators, who believe life, risk and who knows perhaps even love can be controlled by just pushing some buttons.

Now the sophistication of their games will only increase the possibilities of introducing additional systemic risks in the market, creating instability, perhaps plenty of virtual growth, but certainly no sustainable real growth. The regulators in Basel have no interest in that and they have yet to tell us what they think the purpose of our banks should be.