And where are the smart principles for regulating regulations?

Sir, John Kay directs his “A smart business is dressed in principles not rules” January 12, to the people in Basel dealing with the regulations of banks. To that I would indeed add the following:

Bankers, as a principle or as rule, should believe they can master quite adequately default risks. Who wants to deal with a banker who does not?

The regulators, as a principle, and as a rule, should always answer the bankers “No you can’t… and besides there are so many other risks to be considered than just avoiding defaults”

It is bad enough when regulators fall for the sales pitch of bankers, but so much worse when regulators arrogantly decide what is the risk that should be regulated and try themselves to be the masters of that risk, with or without the help of credit rating agencies.

Currently the regulators who failed conquering simple risks of defaults are now tackling more God-like events like pro-cyclicality. God help us! Where are the smart principles for regulating regulations?