Why are bank regulators obsessed with already used perceived credit risks and totally blind to job creation and Mother Earth?

Sir, Lucy Kellaway asks “Why we are more vocal about loo rolls that our jobs” July 21.

In the same vein I have for soon two decades asked why bank regulators are more than vocal, really obsessed, with credit ratings, and complete ignore such things that society would like to have banks financing, like the generation of new jobs or fighting climate change.

The risk-weighted capital requirements are stupid, because bankers already take into account whatever credit risk information is available when they set interest rates and decide on the size of exposures, and so there is no need to clear for the same information twice.

How much more interesting would be to allow for slightly smaller capital requirements, which means bank can leverage more and earn a higher return on their equity, based on something more useful, like potential-of-job-generating-ratings or Sustainability-of-Mother-Earth ratings.