February 13, 2017
Sir, you correctly write: “The capital weighting of many risky securities simply makes prop trading uneconomic. This is why banks in Europe have also reined in trading activities, even though Volcker does not apply to them.” “Drop the Volcker rule and keep what works” February 12.
Sir, If you see that, I truly do not understand how you cannot get your hands around the fact that the capital weighting of many risky borrowers, simply makes lending to SMEs and entrepreneurs uneconomic for the banks, and making it impossible for the real economy to respond sufficiently to all the stimulus offered?
From Wikipedia I get: “A mental block can be an inability to continue or complete a train of thought, as in the case of writer's block. A similar phenomenon occurs when one cannot solve a problem in mathematics which one would normally consider simple”
Wikipedia also states “one tactic that is used when people with mental blocks are learning new information, is repetition”. Sir, you know how I have tried to help you repeating my arguments way over 2.000 times, but sadly all these efforts have until now been to no avail.
Sir, strictly between you and me, don’t you think that, just in case, it would be wise to set up an appointment for you in order to have a Psychological assessment? I mean, what have you to fear? You did not come up with those crazy regulations that assign a risk weight of only 20% to the for the banking system so dangerous AAA rated, while weighting the totally innocuous below BB- rated with a whopping 150%