If global bank regulations are as bad as the current, then a fragmented system is better.

Sir, John Plender concludes his “StanChart is a reminder of banking’s insatiable greed”, August 10, with “competition between financial centres is a trivial issue when compared with the wider global threat to jobs and growth. The stakes in this unfolding saga are uncomfortably high.” And he is absolutely right. 

But Plender also refers to the “growing risk that the regulatory response to scandals could, as a byproduct, lead to the fragmentation of the global financial system”, and there I must remind him that a global financial system subject to the wrong global financial regulations is worse than a fragmented system, where at least perhaps some places could do it better. 

For instance a system where a German bank was required to hold 8 percent in capital when lending to a German small business or entrepreneur, only on account of that being perceived as “risky”, while at the same time being able to lend to Greece holding only 1.6 percent in capital because Greece was officially perceived as “not risky”, are not the kind of regulations I would like to see applied globally.