Regulator’s attempt to hold back the financial tide is worse than futile, it is outright dangerous.

Sir, Robert Jenkins holds that “Regulator’s attempt to hold back the financial tide are futile” April 17.

“Futile”? No! Much worse! Outright dangerous! By building higher levels (higher capital requirements) where they and the banks perceive the risks as higher, they fuel the strength of the storm that will, as it always has done in banking, hit the shores perceived as absolutely safe, causing flooding and much sufferings.

It is not, as it translated into a permission to run a 33 to 1 debt equity ratio, that the 3 percent leverage ratio is clearly insufficient What’s worse is that by keeping the risk weights, those which leverage the negative results of perceiving the risks insufficiently, or excessively, the regulators evidence that they still believe themselves to be, the King Canute risk managers of the world.

But that of course could have to do with the fact that most of their subjects, like FT, are too subservient to allow voice to those who question their sanity.

PS. Risk-weighting: “Most humans suffer from this intellectual weakness: to believe that because a word is there, it must stand for something; because a word is there, something real must correspond to the word… As if lines scribbled by chance by a fool would have to be always a solvable rebus!” Fritz Mauthner.