The Basel Committee, with its Basel II, was at least 90% responsible for AAA rated AIG´s collapse.

Sir, of course “Insurers may be at the centre of the next big crisis” as Patrick Jenkins writes, December 27.

But when Jenkins describes AIG´s collapse in terms of it becoming “diversified so fast that it became impossible to manage and regulate”, he does not explain with sufficient clarity what really happened.

AIG, by having an AAA rating, was granted by bank regulators the gift of by lending its name, being able to reduce immensely the capital requirements for the banks. And that was worth so much in the market, that the banks went crazy borrowing AIG´s name and AIG lending it out… and no credit rating agency was fast enough to pick that up.

Had not Basel II been approved, something else bad could have happened to AIG, but not what happened. And I just wonder why this insistence on shielding the regulators from the truth that they were (and are) the party most responsible for the crisis, because of how they distorted all bank resource allocation, with their stupid capital requirements based on some perceived risks which are already cleared for by other means.

The members of the Basel Committee should be made to parade down our avenues wearing dunce caps. If there is one single spot where total accountability must be absolutely required, that should be in those committees that take upon them to design global rules for all.

The thought of having the same failed bank regulators given some powers to also regulate the insurers, “now a crucial part of the so called shadow banking sector” is as scary as can be.