FT, I dare you!

FT, I dare you, following your motto “without fear and without favour”, to mark to market the bank regulators, like you so valiantly do with fallen Berlusconi in “Public Liability”, November 12. 

For instance, by allowing banks to hold zero or minimal capital against loans to their "safe" sovereigns, how many billions in lower interest did the regulators subsidize governments with? How much of the excessive sovereign debt is the direct result of such regulatory bias? How much bank lending to “risky” small businesses and entrepreneurs did not happen, only because these had to pay higher rates to make up for not being treated equally favorable?

In November 1998 in an Op-Ed titled “Burning the bridges in Europe” and that had to do with the fact there was no route out of the euro I wrote: “That the European countries will subordinate their political desires to the whims of a common Central Bank that may be theirs but really isn’t, is not a certainty. Exchange rates, while not perfect, are escape valves. By eliminating this valve, European countries must make their economic adjustments in real terms. This makes these adjustments much more explosive.” 

That Op-Ed clearly shows that I predicted what is now happening, but, what I was not aware of at that time, because I am neither a banker nor a regulator, was that the bank regulators were going to impose such a sick and really communistic capital controls in favor of their governments. Shame on them!

In the name of Europe, America and the Western World, you of the Basel Committee go!

Yes, you wrote to Berlusconi “In the name of God and Italy go!” November 5 and I do not object to even one comma.

But, in the same vein, I would tell all bank regulators even loosely associated with the Basel Committee “In the name of Europe, America and the Western World go! Their treacherous risk avoidance gospel they preach to our banks, if allowed to continue, is going to take Europe, America and the Western World down.

Could axing an anti-graft watchdog actually reduce graft?

Sir I read the report by Guy Dinmore and Michael Peel titled “Italian premier to axe anti-graft watchdog” July 18 and was of course duly upset. But then I started to think about the figures mentioned and as a yearly budget of 2.5m Euros to fight corruption in Italy seems not to be sufficient it could actually be more honest, and less corrupt, not having a watchdog at all.

It also reminded me of once when at an anti-graft conference I commented that those selling themselves as “anti-corruption experts” sometimes sounded to me as if they could themselves be involved in an extremely subtle form of corruption. I got some strange looks!