October 13, 2012

Bank regulators needed no new technology to turn the tables against bankers and professors… chutzpah and hubris sufficed

Sir, Christopher Caldwell in “When technology turns the tables against the punters” October 13 refers to Professor Joseph Stiglitz arguing in “The Price of Inequality” “that advances in economic and behavioral psychology have improved the possibilities for politicians and pundits to manipulate the public”.

I am not sure those advances were needed to do that. For instance bank regulators managed, as if they were some top notch risk managers for the world, using just a lot of chutzpah spiced with hubris, to set the risk weights which determined the capital requirements of the banks based on perceived risk, and turn the tables against bankers and Nobel Prize winning professors alike.