What are historians going to say about creating a union of dysfunctional banks in Europe?

Sir, I am sure historians will be scratching their heads trying to figure out how the bank regulators of the Basel Committee for Banking Supervision, and of the Financial Stability Board, could have been so dumb so as to base their capital requirements for banks on perceived risks already cleared for by markets and banks through interest rates, amounts exposed and other contractual terms. 

Most probably they will be explaining it in terms of the incestuous group think which can result when allowing “experts” to debate such matters in a mutual admiration club subject to absolutely no accountability at all. 

And the whole idea of creating a union of dysfunctional banks unable to allocate economic resources could be analyzed would also be laughable were not the consequences of it so tragic. 

Wolfgang Münchau, in “Politics has undermined hopes of a banking union” December 17, writes about “when the crisis returns, as I expect, in 2013”. But the truth is that the crisis is already here, and each day that goes by without eliminating the regulatory distortions, only guarantees that its next symptomatic outbreak will be meaner, with or without a banking union.