September 18, 2014

Britain, frankly, don’t you think your forefathers would be ashamed of you.

Sir, I refer to Mure Dickie´s “Battle for Britain”, September 18.

As a professional, with an MBA, I left a very good paying job in my homeland Venezuela, and with the financial support of my father in law, spent a whole year with my wife in London, as an intern at Kleinwort and Benson, and studying corporate finance at London Business School, and International Economic at the London School of economics.

Now, why on earth would I do a thing like that? If I had to explain it, besides of course being alone with my wife, and the English music groups of the 60s, it would be because of Winston Churchill, the traditions of English merchant banks, and British stiff upper lips.

And therefore it has been so sad to me to observe over the last decade, how for instance the Financial Times, the paper I then eagerly read and now just read, does not care one iota about the fact that bank regulations, with credit risk based capital requirements, is making Britain into just another run of the mill risk-adverse nation.

Frankly, don’t you think your forefathers would be ashamed of you.

And then, same day, I read John Gapper admonishing “Scotland has to be braver to build strong banks”, and my reaction is… is this a joke? What about Britain recovering some of its own brave banks?

PS. How is it possible that FT finds nothing wrong with banks being able to leverage so much more their equity for what is perceived as absolutely safe than for what is perceived as risky, when those credit risk perceptions have already been cleared for with interest rates (risk premiums) amount of exposure and other terms? If you absolutely must distort with capital requirements, would it not be better to do so with a purpose, like the creation of jobs or the sustainability of mother earth?

PS. FT has been squarely in favor the NO with respect to Scottish independence. Can you imagine what we could have achieved if FT had taken a similar position on allowing some unelected regulators to distort the allocation of bank credit in our economies?