February 04, 2011
Sir, Paul Collier in “Forget Plan B. It’s Plan A+ that Britain needs” February 4, leaves all stimuli to be done to the Government; suggesting to constrain the market’s nervousness with some deft now you see it now you don’t magic.
What about opening space for the private sector, by for instance reducing some of the capital requirements for banks when lending to what is perceived as risky, and that has obviously had nothing to do with this financial crisis. Getting rid of the odious and regressive regulatory discrimination of what is perceived as risky is the least risky way to proceed.
To keep on risk-weighing UK public debt at zero percent, while risk-weighing an unrated UK small business at 100%, is a sure recipe for disaster.