September 01, 2016

Trivia: What’s more risky for the bank systems, what’s perceived as risky or what’s perceived as safe?

Sir, Tim Harford, referencing the work of two psychologists, David Dunning and Justin Kruger writes: “The incompetent ones were blissfully unaware of their incompetence. The good students knew that they were good; the bad students had no clue that they were bad.”, “Can trivia help us to be less ignorant of our own ignorance?” September 1.

Sir, when I think about what the bank regulators have done with their risk weighted capital requirements for banks; and that after decades they still don’t know it, I can only conclude that according to Dunning and Kruger they would qualify as incompetent ones blissfully unaware of their incompetence.

I am not a bad person, and so I would have no problem leaving those besserwissers to their illusions but, unfortunately, they are doing too much damage to the future of my children and grandchildren, and so I have to fight them… and so should you Sir.