February 22, 2017
Sir, Martin Wolf writes about Narendra Modi’s, the prime minister of India, demonetization of the Rs500 and Rs1,000 notes. Wolf says: “In its boldness…makes everything that US President Donald Trump has done so far look trivial” “India’s bold experiment with cash”, February 22.
Indeed, but why is not Martin Wolf capable of saying the same about those who with incredible hubris introduced the credit-allocation distorting risk weighted capital requirements for banks?
Sir, imagine, that was so statist that it assigned the sovereign a risk weight of 0% while hitting us “We the People” with 100%
Sir, imagine, that was so utterly dumb that it assigned the dangerous AAA rated a risk weight of 20% while hitting the so innocuous below BB- rated with 150%.
Of course that has caused what is perceived, decreed or concocted as very safe to dangerously receive too much bank credit.
Of course that has caused dangerously for the real economy, millions of “risky” SMEs and entrepreneurs being denied access to fairly small loans.
Sir, it is clear that the Basel Committee for Banking Supervision has been much more dangerously bold and dumb than either Modi or Trump, at least until now.
Or is it that Martin Wolf, for reasons unknown to me, does not agree with my assessment?
PS. I just returned from Sweden. There they have now recalled old coins and issued new ones that do not work for paying parking or using any other coin based equipment. And Venezuela is also suffering from even worse currency changing craziness. Is it a contagious virus? Who can we trace it to?