February 09, 2013

Is John Gapper of the Financial Times now censored? If so I urge him to rebel, “without fear”

Sir, John Gapper writes “banks do not have the capital to spare but institutional investors and some wealthy countries do”, but that “such investors are not risking money on entrepreneurs”, and so “the bulk of current dealmaking has little or nothing to do with the real economy”, “Money, money everywhere – except the real economy”, February 9.

Obviously, in a world with very scarce bank capital, the result of banks having been allowed to hold very little capital against what was erroneously perceived as absolutely not risky, whatever lending which requires the banks to hold more capital, like to the “risky” the real economy, will be the most affected. As a result, more than lack of capital, it is bank regulations that are keeping banks out of the real economy.

And this can become much worse if the loony regulators, with their Basel III, are now allowed to also impose liquidity requirements on banks based on preferring “The Infallible” and avoiding “The Risky”.

What I cannot understand is how John Gapper, who must very well know of this, can write his article without even mentioning this fact of overriding importance. Might he be one way or another censored by someone in FT? If so I urge him to rebel, "without fear"