Bank regulators need also to reinvigorate urgently their moral mojos.

Sir, I cannot but express amazement with the abundant and detailed coverage given to of UBS and The Libor Affair by the Financial Times, for instance on December 20, when compared to the so little information given out on what the Basel II bank regulations really was about, The Basel Affair.

For instance, just the simple publication of the tables of risk weights corresponding to “Claims on sovereigns, page 19 and “Claims on corporates”, page 23 and that appears in the June 2006 document that compiles Basel II, with an explanation of what that entailed in authorized leverages to banks when holding different assets, would have enlightened your readers of a problem a thousand-fold more significant than the absolutely illegal Libor incident.

In fact Jonathan Guthrie’s assertion that “Big banks must reinvigorate their moral mojos” should apply as much or even more to the regulators. Here we have public servants deciding, for no other reason than to satisfy their boudoir dreams of a world with no bank failures, that those perceived as risky must pay even higher interest rates to the banks than they would ordinarily have to pay, and those perceived as absolutely safe less, and that, besides being plain stupid, is also plain immoral.

And when Caroline Binham reports on how “Lowball [Libor] tenders aimed to paint a rosy pictures of health [of UBS]” this seems so innocent when compared to the so low capital ratios reported by the banks, because of the risk-weighting of assets, and which really confounded all, including all FT’s experts.