The purpose of a bank is not to fight Aids, but to make profits serving the financing needs of the real economy.

Sir, Gillian Tett refers to BoA and Bono cooperating in fighting global aids “An unlikely pact in making sweet music” January 1. And Tett also quotes Paul Polman of Unilever arguing that many corporate workers want to “find a higher purpose than just making money” and that banks such as BoA have strong motives to “engage” in innovative ways.

It all sounds very commendable but, if I was a bank regulator, which I am not, I am not sure I would agree or even allow a bank which depends so much on implicit government guarantees to do such things.

And I say so because the real purpose of a bank is to make profits to its shareholders, while serving in the most effective way possible, the financing needs of the real economy. And the truth is that every dollar BoA or other banks would spend in these ways, out their pre-tax earnings, will diminish their capital, and thereby diminish their capacity to lend to medium and small businesses, entrepreneurs and start-ups… something which would help all… including those fighting against Aids.

How sad that elites meet in Davos and are not capable to discuss much more fundamental issues such as why the regulators, when setting the capital requirements that are supposed to cover for unexpected losses, did so based on perceived expected losses. This which has created total havoc in the allocation of bank credit to the real economy is a much more important issue. Yet it is ignored… most probably as it steps on the toes of all bankers making huge risk-adjusted returns on equity when lending to "The Infallible".

Getting rid of the risk-weighting of the capital requirements... that would indeed represent sweet music to all the unemployed youth.