Bank regulation technocrats are among the most powerful and dangerous authoritarians

Sir, Nick Pearce writes “In the year of Brexit, Donald Trump and Vladimir Putin, liberalism has been declared dead and buried”, “Reclaim liberalism from the authoritarians.” December 20.

Sir, let us not forget that authoritarians can come in many different shapes. Some of the most powerful, and most dangerous, are the bank regulation technocrats. On their own, without consulting much outside their mutual admiration club, with immense hubris, they decided they could make our banks safer by imposing risk weighted capital requirements for banks. As if the only purpose of banks in to be safe. They also smuggled in statism by declaring a 0% risk weight for the Sovereign and a 100% risk weight for the citizen.

Their regulation distorted horrendously the allocation of bank credit to the real economy. By for instance pushing those securities that obtained an AAA rating, and empowering Sovereigns like Greece to take on too much debt, they caused the 2007-08 crisis.

By making banks no longer finance the “risky” future and only refinance the safer past or present, they imposed on our economies what some have called secular stagnation.

One could easily argue that many of the difficulties of liberalism that Nick Pearce describes here, are the direct responsibility of these regulators

And their contestability is zero. That I can evidence with hundreds of letters, questions, opinions posed directly to many of them, for much more than a decade. No answers, and when they respond, it is as if they have not heard the question.

Sir, unfortunately, to enlist FT in the quest of getting some answers out of these authoritarians has proved to be impossible, this no matter how much you pride yourself with your motto “Without fear and without favor”.

@PerKurowski