December 07, 2016

Martin Wolf is still unconcerned with the distortion in credit the risk weighted capital requirements for banks cause

Sir, Martin Wolf writes “so long as the eurozone fails to deliver widely shared prosperity, it will be vulnerable to political and economic shocks” “More perils lie in wait for the eurozone” December 7.

I just want to record that once again Mr. Wolf does not mention that the layering of risk adverse risk weighted capital requirements for banks, on top of the natural risk aversion of bankers, makes it impossible to deliver a sustainable growth that fosters prosperity; and much less an inclusive one, since that piece of bank regulation only decrees inequality.

But then again there might be the possibility that Mr. Wolf does still not understand this.