April 04, 2013

Mr. Barney Frank, when will you help stop that odious and stupid regulatory discrimination against “The Risky”?

Sir, Barney Frank the former chair of the House financial services committee, with relation to the Dodd-Frank Act and its implementation writes “Don´t panic financial reform is coming to America” April 4.

Mr. Barney Frank, lending your support to the pillar of current bank regulations, capital requirements for banks which are much lower for assets perceived as “safe” than for assets perceived as “risky”, this even though those perceptions are cleared for by other means, you are allowing banks to earn much higher risk-adjusted returns on equity when lending to “The Infallible” than when lending to “The Risky”.

And, as a direct result, “The Risky” need pay the banks much more than usual in order to make up for this regulatory competitive disadvantage.

And, as a direct result you are guilty of helping to increase the gap between the haves, the old, the history, “The Infallible” and the have-nots, the young, the future, “The Risky”.

And all for nothing as major bank crises never ever occur as a result of excessive exposures to what is perceived as “risky”.

And so if the Congress, in the Home of the Brave, with the assistance of bank regulators, in over 124 pages of assorted regulations, cannot understand and put a stop to this favoring of the access to bank credit of those already favored, “The Infallible”, and which thereby discriminates against the access to bank credit of those perceived as “The Risky”, and who even without these regulations already have to pay more because of those perceptions, then I do indeed believe it could be time to panic.

And I say this because it is precisely in troubled times like this, with growing unemployment, that it is so important that regulators help "The Risky", like small businesses and entrepreneurs, to have access to bank credit in the best possible terms, and not to fight against that!