What bankers do regulators expect to tell their shareholders, “we should go for lower risk adjusted returns”?

John Authers argues that “Push to beat rivals overtakes good economic sense” April 14. Of course it does!

That is why banks, while the illusion of safety persists, must primarily lend to or invest in what is perceived as absolutely safe, because there is where regulators allow them to hold the least capital, and so there is where they can earn the highest risk-adjusted rates of return they need in order to compete with other bankers doing the same… and this even when they all know that long term it all amounts to pure lunacy. 

And if they do not do so, the risk for the banker to be kicked out, or for his bank to be bought out, is just too large... Regulators, it is as easy as that!