Bernanke might be a great inflation slayer but, in terms of job creation and bank regulations, he is in way over his head.

Sir, I refer to Sebastian Mallaby´s “Bernanke – the rebel with a cause” December 19, where he suggests Bernanke as a runner up to Mario Draghi as FT´s person of the year, also much based on the same machismo of offering to do “whatever it takes”.

That fighting unemployment might be a great cause, no one doubts, but let us not forget that the road to hell is paved with good intentions, just like the road to the current bank crisis was paved with good intentioned capital requirements for banks based on perceived risks.

To me any person who sets out to fight unemployment by injecting liquidity while there are regulations in place that will not allow that liquidity flow freely, but will channel it mostly to what is perceived as “The Infallible”, simply has no idea about what creates jobs in the long term, nor about how to regulate banks, since it is only among “The Infallible” ex-ante, that the ex-post real big disasters occur. 

In order to create a new generation of jobs you simply cannot discriminate against the access to bank credit of “The Risky”, the small and medium businesses and entrepreneurs. And in order to make our banks safer, you simply cannot ignore what “The Risky” contributes when helping to create a more sturdy economy.

And so Ben Bernanke might be a great inflation slaying central banker, but, in terms of job creation and bank regulations, unfortunately, he is in way over his head, just like Mario Draghi.