John Kay, is ignorance a defense for regulatory misconduct?

Sir, I refer to John Kay’s “Ignorance is no defense for financial misconduct”, December 9.

Mr Kay, if ignorance stops regulators from understanding how their portfolio invariant credit risk weighted capital requirements for banks dangerously distort the allocation of credit to the real economy; and pushes banks into creating dangerous excessive financial exposures to what s perceived as safe, would that be a defence for regulatory misconduct?

The regulators, with their regulations, rigged the access to bank credit in favor of sovereigns and those perceived as safe and against those perceived as risky, like SMEs. This had disastrous consequences for everyone, except for some bankers who earned big bonuses by being able to leverage bank equity immensely when dealing with what was perceived as safe, or could at least be made out as being safe. 

But we have not even seen the beginnings of holding the regulators responsible for what they did. On the contrary many of them have been promoted.

@PerKurowski ©