Sir, Bank of England’s mandate is to “promote the good of the people of the United Kingdom by maintaining monetary and financial stability” and therefore Chris Giles holds that “The Bank of England needs to speak up on Brexit” April 21.
But there you have BoE steadfastly supporting the Basel Committee’s risk weighted capital requirements for banks, which so dangerously distorts the allocation of bank credit to the real economy.
The merchant bankers that helped England prosper would currently not be able to do so, because all they would be doing, like the rest of banks, is investing in public debt and residential mortgages or lending to some AAArisktocracy.
Now you do not have banks that finance the riskier future, they only refinance the for the short time being safer past.
Frankly, when compared to that regulatory reality, the risks with Brexit, though these could be large, sound minor to me.
Few months ago Stefan Ingves, the current chair of the Basel Committee, innocently used the story of an infamous Swedish warship, the Vasa, in order to illustrate the work of the Basel Committee. Ingves is totally unaware of how applicable that story still is.
@PerKurowski ©