You, not so old journalist of @FT, say something! Help take the economy out of the respirator and to send it to rehabilitation

Sir, Mr John Riding in “Negative rates will not help investment spending” December 18, comments on Larry Summers’ “thesis of secular stagnation”.

Riding writes: “It seems to me that the impediments to stronger investment spending in the US are not monetary in origin and forcing negative real or nominal interest rates would distort asset markets further without providing meaningful stimulus to the economy”.

And he is absolutely right. What is needed to promote stronger investment spending is to get rid of those senseless risk-weighted capital requirements which allow banks to earn much higher expected risk-adjusted returns on equity on “absolutely safe” exposures, than on “risky” exposures.

That stops banks from financing the “risky” future and to concentrate instead on refinancing the “safer” past… as if what is safe today was not quite often very risky yesterday.

Sir, again, though you have clearly shown you prefer to turn a blind eye to it, you must know for sure that, in order to become and remain strong, an economy requires a lot of risk-taking, as dumb risk aversion will only make it a weakling.

And while that risk-adverse bank regulation is in place, any type of outside assistance, be it fiscal stimulus or quantitative easing, will just put the economy in a respirator, instead of having it go to rehabilitation.

Any sign of growth you might see in the interim, is pure froth… or let´s say pure fat no muscles… in other words the economy turning dangerously obese.

How curious FT does not want that to be discussed. Might it be that most of its journalists are soon to be retirees and who all fit an ultraconservative investment profile?

I sure hope that at least some of FT's younger members find it in themselves to further the cause of astute risk-taking. For that they should just perhaps reflect on the fact that any investment adviser who provided them, at their ages, with the kind of advice the Basel Committee provide the banks, would soon be prohibited to give any financial advice… and would have any professional certification revoked.