The risk-weights is what most is causing the tumor growth of the ‘too big to fail’

Sir, John Kay in “The nightmare of taking on “too big to fail” April 13, questions the overall adequacy of a 10 percent capital requirement for banks, ignoring that this will much depend on what risk-weights are applied. In this respect we should not ignore that a meager 6 percent capital requirements, applied across the board for all assets, would produce a far smaller too-big-to-fail bank, than a general 10 percent capital requirement that is allowed to be diluted by applying risk-weights for different assets. Take away the risk-weights that the regulators arbitrarily set and which also distort as they take in account what the market has already accounted for, and you will take away the most cancerigenous element that causes the TBTF tumor.