November 13, 2016
Sir, ‘end of history’ Francis Fukuyama, when referring among other to that “systems designed by elites — liberalised financial markets” writes: “Today, the greatest challenge to liberal democracy comes not so much from overtly authoritarian powers such as China, as from within” “US against the world? Trump’s America and the new global order”, November 12.
If Fukuyama, like most other discussing the post 1989 world had taken notice of the 1988 Basel Accord, their conclusions would have been quite different. As a minimum they would not be referencing a liberal world order.
That is because the introduction of risk-weighted capital requirements for banks, which set a risk weight of 0% for the sovereign and 100% for the We the (risky) people, has obviously nothing to do with a liberal order, and much more to do with runaway statism.
Sir, the so often mentioned and disavowed neoliberalism is simple froth on the surface. Pure and unabridged statism is the real undercurrent that guides our economies.
If only researchers, for instances at the IMF, had researched what those bank regulations have signified to lower the interests on public debt, and to make it harder for SMEs and entrepreneurs to access bank credit, our current financial policies, and consequently our economies, would have looked quite different.