Not “bad” bank assets, bank capital heavy assets

Sir Francesco Guerrera and Patrick Jenkins report “Citi in sales of bad assets as Basel III rules loom” April 19. The titling is not that accurate since what is being done has very little to do with whether the assets are good or bad and all to do with whether they require more or less of those capital requirements that Basel tied up our banks with when the regulators decided to become risk-managers themselves. What a sad world!

And how sad too that a Financial Times have yet not said one word after so many letter I have written about that huge regulatory mistake the regulators committed in Basel II when considering the credit ratings for setting the capital requirements even though these credit ratings had already been considered by the banks and the markets when setting their risk-premiums and interest rates.