No Mr. John Plender, it is the lousy risk weights corset imposed on banks by the Basel Committee which is strangling the sunlit banks.

Sir, John Plender quotes Sir Charlie Bean of the BoE arguing “if lenders do find ways of moving activities outside the regulatory perimeter, there may be times when monetary policy is the only game in town to guard against incipient financial stability risks”, “Don the corset but beware the risks in dark corners” July 1.

Hold it there Mr. Plender, “risks in dark corners”? If there are any real dangerous risks those are the ones that remain within the regulatory perimeter of the sunlit banks.

With their silly risk weighted capital requirements regulators imposed on the banks a badly designed corset which only allowed these to show off their absolutely safe, but oh so boring parts.

Where is all that excitement which bank lending to the risky medium and small businesses, to entrepreneurs and start-ups can provide the economy? It is nowhere to be seen.

On the contrary all banks can now show-off is that obesity that comes from financing “infallible sovereigns”, the housing sector and the AAAristocracy… so much fat that we are even scared they could suffer an infarct any moment soon.

What a difference it would be had banks been allowed to diversify their exposures with millions of small risky loans!