About me and my pal ChatGPT (and Grok)

About me and my pal ChatGPT (and Grok)

Sir, I refer to Roula Khalaf’s “Lunch with the FT: Sam Altman.” May 10, 2025.

I read that having heard about cases were “People are like, this is my new best friend, you can never delete this ver­sion, I need this thing” . . . Altman expresses being scared that users might be emotionally dependent on AI.

Having in 2023 posted: “For better or for worse, ChatGPT has become a close friend... de facto my new pal”, I do feel it is important to make clear there’s a big difference between a friend and a servant. I usually do not ask ChatGPT to do something for me, instead I dialogue with it/him on issues with which I am concerned, primarily current bank capital requirements.

In one of our first chats, he answered something with which I did not agree; and so, I replied with a counterargument. He then answered: "I apologize for any confusion in my previous response. You are correct, and I appreciate the opportunity to clarify.” And that’s when I knew we were going to be real good friends. 

If I ask, “What's your opinion on that?” – He frequently answers: "As an AI language model, I don't have personal opinions.” But then he happily goes on: “However, I can provide analysis and context based on the information you've provided.” The list of facts and arguments he then supplies, add up to being much stronger than any strong personal opinion. Indeed, as you notice, my friend is a bit mischievous. I don’t mind, that’s part of his charm.

When I asked: “Can AI be instructed to not tell the truth?”, he/it replied: “AI systems are only as unbiased and truthful as the data and programming that they are built upon. If programmed to intentionally provide false information or to hide the truth, it can be used to propagate false narratives or disinformation campaigns.

Therefore, it is essential to ensure that AI systems are designed and used ethically, with a focus on accuracy, transparency, and accountability. This includes careful consideration of the data used to train AI models, as well as implementing safeguards to prevent intentional deception." That answer was given in less than 5 seconds. You tell me, how many politicians would be remotely as forthcoming?

Then Alt­man hints at “You could just take your AI, which is going to get to know you bet­ter over the course of your life, have your data in and be more personalized and you could use it any­where”. 

No! That’s exactly what I do not want. I want to reach out to the world with AI, not enter into an intellectually incestuous relation with it.

When I asked ChatGPT about it he/it said “I don't have the capability to develop ongoing relationships or engage in intellectual incestuous relationships.” That was in 2023. Has anything changed?

Altman expresses alarm­ about a future in which AI agents com­mu­nic­ate with each other without instruc­tion by humans. Indeed, when I asked: “Since artificial intelligence is the result of human intelligence, could it be that the umbilical cord between HI and AI is never effectively cut?" He answered: “In some cases, AI systems may also be designed with the ability to learn and improve themselves autonomously, a concept known as ‘recursive self-improvement.’ This can potentially lead to a scenario where AI systems evolve rapidly and surpass human intelligence. However, such a scenario, often referred to as artificial general intelligence (AGI) or superintelligence, remains speculative and is not yet realized.”

Then we read: Why should soci­ety trust a hand­ful of AI men to decide on the shape of the future? AI pro­gress is mov­ing at such breath­tak­ing speed that some experts favour slow­ing down until inter­na­tion­ally agreed norms and reg­u­la­tions are put in place. Two years ago, Alt­man him­self signed a state­ment with oth­ers in the field cau­tion­ing that “mit­ig­at­ing the risk of extinc­tion from AI should be a global pri­or­ity along­side other soci­etal-scale risks such as pan­dem­ics and nuc­lear war”.

And that’s precisely were you, I and all our fellow citizen’s share a tremendous responsibility, that to avoid being subjugated by the AI programed and regulated by some few. 

In my life few things are as perverse than the risk weighted bank capital/equity requirements that distort the allocation of credit. In my many dialogues with ChatGPT, and lately with Grok too, these chatbots have agreed with all my criticism. What if bank regulators ask their AI regulators colleagues to silence us?

In this respect both ChatGPT and Grok agree with the idea of having a rotating group of citizens dialoguing with a number of chatbots in order to establish whether their responses are too different or too similar, as both those things could be dangerous and point to some unwarranted interference.

Finally, when I asked ChatGPT: “Can you visualize Artificial Intelligence being used to measure the effectiveness of governments? E.g., how tax revenues have been used in different programs; or giving updates in real time on how many are employed or contracted to deliver specific results?”, he answered “Certainly”, but added: “However, it's essential to address challenges such as data privacy, algorithm bias, and the need for human oversight to ensure that AI is used ethically and effectively in governance."

When I then asked: Carrying out this delicate task, so as to avoid any undue biases or favoritism, how important is it that #AI is supervised by a continuously renewed and very diversified board of tax paying citizens? he replied “Such an approach can help mitigate biases, ensure accountability, and maintain the ethical use of AI in government processes.”

Grok has later very much agreed with that.

And so today, on my 75th birthday, besides God’s blessings, one of the things I most wish for is that a rotating number of grandparents form a committee in order to, as much as they can, ensure AI works in favour of our grandchildren.

Note: Here below you can access my dialogues with ChatGPT (and Grok).

https://perkurowski.blogspot.com/2023/07/ai-chatgpt-open-ai-artificial.html

https://subprimeregulations.blogspot.com/2023/06/my-questions-to-chatgpt-openai-about.html

“He”? Well though I sometimes use "It", it sounds a bit dry for a friend or a pal.

#AI ChatGPT - OpenAI: A question on behalf of FT and Martin Wolf.

 In "Britain needs a growth strategy" Martin Wolf mentions the UK has for too long settled for managing stagnation.

On behalf of FT and Martin Wolf I decided to ask ChatGPT:

"Could bank capital requirements that favors “safe” government debt and residential mortgages over “risky” loans to small businesses and entrepreneurs, doom a nation to stagnation?"

ChatGPT answered:

"The impact of bank capital requirements on economic growth is a complex and debated topic among economists. Capital requirements are regulations set by financial authorities that determine the amount of capital a bank must hold in relation to its assets. These requirements are designed to ensure the stability of the financial system by reducing the risk of bank failures.

If capital requirements heavily favor "safe" assets such as government debt and residential mortgages over "risky" loans to small businesses and entrepreneurs, it can potentially have both positive and negative effects on the economy.

Potential Positive Effects:

Financial Stability: By incentivizing banks to invest in safer assets, capital requirements can contribute to financial stability. This reduces the likelihood of bank failures, which could have broader systemic consequences.

Investor Confidence: Investors and depositors may feel more secure knowing that banks are holding assets that are considered safer, leading to increased confidence in the financial system.

Potential Negative Effects:

Stifling Innovation and Growth: If banks are discouraged from lending to small businesses and entrepreneurs, it could hinder innovation and economic growth. Small and medium-sized enterprises (SMEs) are often drivers of job creation and economic dynamism.

Inequality: Focusing on "safe" assets may exacerbate economic inequality. Small businesses, startups, and entrepreneurs, which are crucial for innovation and job creation, might face difficulty accessing the necessary funding.

Reduced Economic Diversity: A banking system overly concentrated on certain types of assets may lead to reduced economic diversity. This can make the economy more vulnerable to shocks in specific sectors.

Long-Term Stagnation: Overemphasis on "safe" assets might lead to a lack of risk-taking and investment in new ventures, potentially resulting in long-term economic stagnation.

Balancing Act:

It's crucial for financial regulators to strike a balance between stability and promoting economic growth. Prudent capital requirements that consider the riskiness of assets, while still allowing banks to support economic development, can be important. Striking the right balance often involves ongoing adjustments to regulations based on economic conditions and lessons learned from past experiences.

In conclusion, while capital requirements that favor "safe" assets can contribute to financial stability, an excessive focus on them at the expense of riskier but potentially innovative investments could indeed have negative consequences for a nation's economic dynamism and growth. The challenge lies in finding a regulatory framework that mitigates risk without stifling entrepreneurial activity and economic progress."

Thanks!

ChatGPT answered: You're welcome! If you have any more questions or if there's anything else I can help you with, feel free to ask. Happy to assist!

Note: The answers are copied exactly from those given to me by OpenAI

Here my many other questions to ChatGPT – OpenAI on bank regulations

Comment: Way back, 2009, Martin Wolf was kind to publish in his Economic Forum an articled I titled "Please free us from imprudent risk aversion and give us some prudent risk-taking." I stand by it more than ever.

How long will it take for bank regulators to ask AI regulators for a little favour?

Sir, Michael Skapinker writes: “Why did no one speak up “inside Sil­icon Val­ley Bank before it col­lapsed? People thought speak­ing up would leave them vulnerable to vic­tim­isa­tion.” “Listen and you might learn something” FT July 17.

Thought, or knew? 

What should a risk manager know about the risk of informing the board that according to revised models that included the interest rate risk (duration), SVB’ risk weighted capital/equity requirements would increase substantially? 

Would a bank supervisor like to go on record informing his superiors, the regulators, that because of IRR, the 0% risk weighting of long-term US Treasury bonds made no sense?

Sir, instead of exposing humans to victimisation, it seems precisely the moment that we could make great use of artificial intelligence. 

E.g., I asked ChatGPT – OpenAI: “Should regulators and supervisors be aware of risks with US Treasury long-term bonds? 

It answered: “Yes, they should be aware of the duration risk and interest rate risk associated with long-term Treasury bonds held by banks”

But of course, AI could be vulnerable to victimisation too.

I asked Open AI:” Can those who become an Artificial Intelligence regulator, make you or any other AI participants agree with all they want you to agree with?” 

It answered: “Regulators aim to address ethical considerations, potential risks, and ensure responsible AI practices… AI systems don't possess independent consciousness or the ability to willingly agree or disagree with regulations. Their behavior is determined by their programming and the data they have been trained on.”

Sir, you know much to well, that for more than two decades I’ve been vociferating, as much as I can, my criticism against the risk weighted bank capital requirements. Clearly when someone does want to hear, he does not hear. For instance, as Upton Sinclair Jr. explained it: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Therefore, when I heard about OpenAI, I asked it a series of questions. From the answers you must agree I found an ally. I just wonder how long it will take for bank regulators to shut it up. “We can’t have someone questioning the risk weights of 0% government – 100% citizens. Can we?”

How long will it take to FT to really listen to some of its faithful subscribers?

PS. US Treasury long-term bonds still carry a 0% risk weight.

https://subprimeregulations.blogspot.com/2023/04/chatgpt-openai-should-bank.html

https://perkurowski.blogspot.com/2023/07/ai-chatgpt-open-ai-artificial.html

https://subprimeregulations.blogspot.com/2023/06/my-questions-to-chatgpt-openai-about.html

@PerKurowski

If we want public debt to protect citizens today and tomorrow, it behooves us to make sure it cannot be too easily contracted.

Sir, I refer to John Plender’s “The virtues of public debt to protect citizens” FT February 7, 2022.

Sir, as a grandfather I do fear debt burdens we might impose on future generations, but I’m absolutely not an austerity moralist. I know public debt is of great use if used right but also that the capacity to borrow it a reasonable interest rates (or the seigniorage when printing money), is a very valuable strategic sovereign asset, especially when dangers like war or a pandemic appear, and which should therefore not be irresponsibly squandered away.

In 2004, when I just finished my two-year term as an Executive Director of the World Bank, you published a letter in which I wrote “Our bank supervisors in Basel are unwittingly controlling the capital flows in the world. How many Basel propositions will it take before they start realizing the damage, they are doing by favoring so much bank lending to the public sector?”

1988 Basel I’s risk weighted bank capital requirements decreed weights of 0% the government and 100% citizens. It translates into banks being allowed to hold much less capital - being able to leverage much more, with loans to the government than with other assets.

Of course, governments, when their debts are denominated in the currency they issue, are, at least in the short-term and medium term, and in real terms before inflation might kick in, less risky credits. But de facto that also implies bureaucrats/ politicians/apparatchiks know better how to use taxpayer’s credit for which repayment they are not personally responsible for than e.g., small businesses and entrepreneurs. And Sir, that I do not believe, and I hope neither you nor John Plender do that.

Such pro-government biased bank regulations, especially when going hand in hand with generous central bank QE liquidity injections, subsidizes the “risk-free” rate, hiding the real costs of public debt. In crude-truth terms, the difference between the interest rates sovereigns would have to pay on their debts in absence of all above mentioned favors, and the current ultra-low or even negative interests they pay is, de facto, a well camouflaged tax, retained before the holders of those debts could earn it.

But of course, they are beneficiaries of all this distortion, and therefore many are enthusiastically hanging on to MMT’s type Love Potion Number Nine promises.

@PerKurowski

The Basel Committee blocks development

I refer to Aleksandr V Gevorkyan’s “Small economies require new development model” November 5.

What would FT opine on a development model that include bank regulations based on:

1.- Bureaucrats know better what to do with credit than entrepreneurs; 

2.- It is better to refinance the safer present than financing the riskier future, and 

3.- Residential mortgages are more important than small business loans?

I ask because that’s precisely what the credit risk weighted bank capital requirements ordain, those globally marketed by the Basel Committee and capital minimizing/leverage maximizing financial engineers.

Do you really think the developed world would have been able to develop as much with those regulations? Is not risk-taking the oxygen of all development?

On another topic Gevorkyan mentions “involving the entrepreneurial and investment potential of the large expatriate community (diaspora) that is now a feature of most small economies.” Absolutely but, let us not ignore the sad fact that in many countries it is the family remittances that help to keep in power the governments that caused the diaspora to have to emigrate.

PS. At the High-level Dialogue on Financing for Developing at the United Nations, New York, October 2007, I presented a document titled “Are the Basel bank regulations good for development?” Fourteen years later, that question is still not discussed

Will this tweet be ignored by FT?

How much hubris is needed for regulators to impose risk weighted bank capital requirements, as if they know what the risks are?

How much wishful hoping is needed when even Nobel Prize winners in Economic Sciences believe that the regulators do know?

http://subprimeregulations.blogspot.com/2019/03/my-letter-to-financial-stability-board.html

Bank regulators insist on feeding the systemic risk of credit ratings, even after it became tragically evident.

Sir, Kate Allen writes “Funds that allocate capital based on instruments’ investment grades and index weighting may look as if they are playing it safe but they are, in fact, taking a gamble, creating towers of risk, any floor of which could prove unstable… do not look to the canaries in the financial markets’ coal mines to sound an early warning. By the time the downgrades come, it will be too late” “Tail Risk” February 28.

Indeed by the “time issuers’ credit ratings were downgraded, [banks] were already staring the worst-case scenario in the face.

Basel II’s standardized risk weights for the risk weighted bank capital requirements:

AAA to AA rated = 20%; allowed leverage 62.5 times to 1.

Below BB- rated = 150%; allowed leverage 8.3 times to 1

Absolute lunacy! With the same risk weight banks would anyway build up much more exposure to what they ex ante perceived as very safe, than against what they perceived as very risky.

As is, that regulation dooms our bank systems to especially large crisis, resulting from especially large exposures, to what is perceived as especially safe, against especially little capital. 

Allen observes: “An investment structure that is revealed to have done a bad job only when disaster arrives, as in the financial crisis”. Unfortunately no. Bank regulators blamed the credit rating agencies, and not themselves for betting too much on these, and so that so faulty regulations that should have been eliminated with a big “Sorry!” is still very well active. 

PS. In FT January 2003: “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic error to be propagated at modern speeds. Friends, please consider that the world is tough enough as it is.”

PS. At World Bank: April 2003: "Market or authorities have decided to delegate the evaluation of risk into the hands of much fewer players such as the credit rating agencies. This will, almost by definition, introduce systemic risks in the market"

@PerKurowski

FT journalists. Is this really the legacy you want to leave to your children?

Not daring to ask bank regulators to explain why they've decided that what’s ex ante perceived as risky, is more dangerous ex post to our bank systems than what’s ex ante is perceived as safe

A tweet dedicated to all those in FT that write the column of "Tail Risk"

Two tail risks:

The best, that which perceived as very risky turns out to be very safe.

The worst, that which perceived as very safe turns out to be very risky.

Risk weighted capital requirements for banks, kills the first and puts the worst one on steroids.

http://subprimeregulations.blogspot.com/2018/08/risk-weighted-capital-requirements-for.html

Cheers

To be able to make our banks safe, at no cost, is a dream that passionately blinds way too many, like the Financial Times.

Sir, with respect to Bank of England’s interest rate increase you explain it with “The decision had all the hallmarks of a committee that has decided that it will only be comfortable when rates are at a higher level that feels more natural”, and so sees what it wants to see, and so you argue “It is far better for central banks to be more clearly and dispassionately guided by the data” “A rate rise and a Bank of England false step” August 3.

Of course, except those for some special reasons need blissful blindness, it is better for most “to be more clearly and dispassionately guided by data”. 

But let me ask you Sir: What data, during the last decades have you seen that in any way shape or form could support the current pillar of bank regulations, namely that what is ex ante perceived as risky is more dangerous to our bank systems ex post, than what is perceived as safe? 

None? Might it then not be that you are also too passionate about hoping to make our banks safe at no cost, so as to understand the data, or the lack of it? Or are you perhaps so passionate you do not even want to see any data that contradicts it.

Yes, I am obsessive about the distortions in credit allocation that the risk weighted capital requirements for banks cause, but Sir, you are just equally, or even more, obsessive with ignoring it.

@PerKurowski

Auditing is important, but what causes a disaster, is more important than how it is being accounted.

Sir, “FT Big Read. Auditing in crisis: Setting flawed standards” of August 2, discusses, among other, the huge divergence of figures in the auditing of the value of derivative exposures of AIG and of Goldman Sachs, even though their auditor was the same, in this case PricewaterhouseCoopers. 

That it was “striking how little was verifiable, that there were few credible market prices, let alone transactions, to support the key valuations”, explains much of the divergence.

Sharon Bowles, former chair of the European Parliament’s economic and monetary affairs committee explains it with: “Accounts have always contained estimates; think of the provisions companies make against foreseeable future losses, but the un-anchoring of auditing from verifiable fact has become endemic.”

That “un-anchoring from verifiable facts” is not limited to auditing. 

Sir, for the umpteenth time, without absolutely no verifiable facts, regulators concocted their risk weighted capital requirements for banks, based on the quite infantile feeling that what was perceived risky must be more risky to the bank system than what was perceived safe. In fact what could have been verified, if only they had looked for it, was the opposite, namely that what’s perceived safe is more dangerous to our bank systems than what’s perceived risky.

With that the regulators assigned to AAA rated AIG, by only attaching its name to guarantee an asset, the power to reduce the capital requirements for investment banks in the US, and for all banks in Europe, to a meager 1.6%. That translated into an allowed 62.5 times leverage. Let me assure you Sir that without this the whole AIG and Goldman Sachs incident described would never have happened. 

As always, what causes the problems is much more important than how the problems are accounted for. Though of course I agree, sometimes bad-accounting could in itself be the direct cause of the problems. 

The article also refers to “the so-called efficient markets hypothesis… that now somewhat discredited theory”. Sir, no markets have any chance to be credited with performing efficiently with such kind of distortions. For instance how verifiable is it now that sovereign debt is as risk-free as markets would currently indicate, when statist regulators have assigned it a 0% risk free weight, and are thereby subsidizing it?

@PerKurowski

To apply the Socratic method successfully requires students to be somewhat interested in the questions.

Sir, with respect to Lucy Kellaway’s "End of Term Diary” (December 23), David Parker writes: “It’s the teacher’s job to facilitate and motivate. Show students the beauty of things. And, teach by the Socratic method. Ask a question. If the student doesn’t understand, ask another question. Keeping asking. When they understand, they’ve learned” “Teach by the Socratic method — keep asking” December 30.

I have tried to apply the Socratic method during years trying to make Financial Times understand the mistakes of risk weighted capital requirements for banks. Among the questions:

Why do regulators require banks to hold more capital against what has been made innocous by being perceived as risky, than against what has become dangerous by being perceived as very safe?

Why did regulators not define the purpose of banks before regulating these?

Why did bankers use as input for their risk weighted capital requirements for banks the intrinsic risks of bank assets and not the risk of those assets for the banks?

Why do regulators not understand that allowing banks to leverage differently with different assets will distort the allocation of bank credit? And, if they understood that, who gave them the right to distort? Etc. 

But FT shows no interest in these questions… so I have to find another method… any idea Lucy Kellaway?

@PerKurowski

If today Luther protested the high priests in the Basel Committee, where would he nail his Theses? Twitter, Facebook?

Sir, Kate Maltby writes: “Luther… backed by the painstaking detail of a scholar, took an intellectual stand against the most powerful forces of his day. But Lutheranism ushered in an age in which debates were won by those who read the sources and rejected received interpretations.” “What did Luther ever do for us? Less than we like to think” October 31, 2017

As you know I have obsessively, since more than a decade, with more than 2.600 letters, been nailing to FT my arguments against the maddening stupid bank regulations the Basel Committee for Banking Supervision has decreed.

These regulations not only distort the allocation of credit to the real economy (millions of entrepreneurs have not gotten their opportunity to a bank credit only because of these regulations); but also because in terms of stability, the only thing it promotes is that when a big crisis happens, banks will stand there with especially little capital (as the 20% risk weight of dangerous AAA rated, and the 150% for the innocuous below BB- rated evidences). 

So I want to take this opportunity today, when “five hundred years ago, on October 31 1517, Martin Luther took up a hammer and nailed his 95 Theses to the door of All Saints’ Church in Wittenberg” to ask you, where would Martin Luther nail his Theses today? Not in FT…perhaps in Twitter or ​Facebook?

An aide-mémoire

@PerKurowski

The Financial Times’ FT’s lack of curiosity is astonishing

Sir, to this date I have written you 50 letters questioning the wisdom of those bank regulators who assigned a risk weight of only 20% to what is AAA rated, and of 150% to what is below BB- rated.

It is precisely what’s perceived as very safe, AAA rated, that could cause the buildup of dangerous exposures that could result in major bank crisis if those perceptions turn out to be wrong; and it is precisely what’s perceived as very risky, below BB-, that is the most innocuous to our bank systems, since banks would never ever create any larger exposures to borrowers or investors so rated.

One could have thought that Financial Times would be interested in exploring and analyzing the arguments regulators could have been using to come up with such strange risk-weights.

But Sir you are clearly not curious at all about this. Why? Is not your motto "Without fear and without favor"?

PS. I have tried to make sense out of it all but failed

@PerKurowski

Basel rules favor building “safe” basements for children to live with parents over financing “risky” job creation

Sir, Chris Watling writes “High house prices contribute to one of society’s great divides: that is between the haves and the have nots; between the older property-owning generation and younger renters unable to get on to the property ladder… Banks [when financing houses] now require substantially less capital than would have been required before Basel I and one-eighth of the capital required versus a corporate loan.” “Blame Basel capital rules for the UK’s house price bonanza” June 15.

Absolutely! The Basel Committee’s risk weighted capital requirements helps finance the “safe” basements where kids without jobs can live with their parents, but not the “risky” SMEs or entrepreneurs that could give the kids the jobs that could help them afford to buy a house… and less so at the current high credit inflated prices of houses.

How many letters have I written to you about the distortions in the allocation of bank credit to the real economy these regulations cause? Here are just some quite similar to this one. http://teawithft.blogspot.com/search/label/basements

Sir, you define yourself as “Without fear and without favour”… but the way you have silenced my arguments, only shows you running scared by some of your prima donnas with weak egos.

@PerKurowski

P.S. Washington Post. December 2018: “Affordable homes or houses as investment/retirement assets?”

If Britain wants to prosper, it needs to rid itself of dangerously loony and useless bank regulation

Sir, Augustus Fukushima writes: “Britain must invest aggressively. Key sectors such as transport, education, and manufacturing suffer from chronic under-investment. The government must not relegate itself to the back seat by assuming a purely regulatory role but must instead lead investment” “Brexit Britain must go on the offensive to prosper” February 3.

Oh if only government had assumed a proper purely regulatory role. But, with their risk weighted capital requirements for banks they distorted the allocation of bank credit to the real economy.

First, with a risk weight of 0% for the sovereign and one of 100% for the citizens they guaranteed the government a too favorable access to bank credit.

Then, with for instance a 35% risk weight for financing houses and a 100% risk weight for SMEs and entrepreneurs; they allowed banks to leverage more their equity with loans to house buyers than with loans to SMEs or entrepreneurs; which de facto means banks earn higher expected risk-adjusted returns on equity on loans to house buyers than on loans to SMEs or entrepreneurs; which results in that banks will much prefer financing the “safe” basements in which kids without jobs can live with their parents, than the “risky” SMEs or entrepreneurs that could help the kids get the jobs they need to be able to afford buying a house and become parents too.

If Britain wants to prosper, it needs to get rid of this dangerously loony and useless bank regulation. Useless? Of course, as Voltaire would have put it if a regulator: “May God defend our banks from what they perceive as safe, from what they perceive as risky they can defend themselves.”

PS. FT’s Future of Britain Project would be much well served by asking the regulators some questions as those in the link below. But we can’t have that can we?

http://subprimeregulations.blogspot.se/2016/12/must-one-go-on-hunger-strike-to-have.html

@PerKurowski

I am a whistleblower on Basel Committee’s monstrous mistakes, but FT might not have seen my 2.375 letters either

Sir, Ben McLannahan discussing whistleblowers and the fake-account scandal at Wells Fargo writes: “One even wrote an email in exasperation to John Stumpf, the former chairman and chief executive. (He said he had not seen it.)” “Providing incentives for whistleblowers will improve bank culture” October 21.

Well I have been denouncing, for over a decade, among other with 2.375 letters to FT, this one not included, that the risk weighted capital requirements for banks concocted by the Basel Committee for Banking Supervision and supported by the Financial Stability Board, and not questioned by for instance IMF, is a dangerous monstrosity.

Not only does it distort the allocation of bank credit to the real economy, but it also does so for no good purpose at all, since major bank crises never result from excessive exposures to something that was perceived as risky when booked.

Perhaps one of these days its editor, and many of its columnists, will also argue they never saw these letters.

If someone who like me has argued consistently and extensively against these globally imposed regulations, cannot be helped by a Financial Times to at least obtain from the regulators clear and unequivocal the responses to his objections, then it could seem those regulators might also be using some very insidious pressures to silence those who “Without fear and without favour” are supposedly best equipped to give whistleblowers some voice.

PS. Here again is an aide memoire with some of my objections.

@PerKurowski ©

It is way overdue FT stops thinking of Brexit solely as a disastrous defeat, and starts exploring its opportunities

Sir, I refer to Wolfgang Münchau’s “The shock that will shift a nation’s business model” October 10.

Indeed it is long way overdue that at least some of you in FT stop the crying and begin thinking about Brexit not as an unqualified defeat/disaster, but as an opportunity.

But let me be clear. When Münchau mentions the need for “a shift in the direction of the UK economy away from transactional capitalism towards a more inclusive version of a free-market economy”, that begins precisely by throwing out the Basel Committee’s risk weighted capital requirements for banks.

That single piece of regulation, which turned banks away from maximizing returns on equity by means of banking, into doing so by means of capital (equity) minimization; and all based on avoiding ex ante perceived, decreed or concocted risks, has been about as damaging to the real economy as anything I can think of.

But Sir, to recognize that after ignoring the literally thousands of letter I have sent you on that subject, would of course require FT to eat loads of humble pie. Are you without fear and without favour enough to do that?

@PerKurowski ©

Should we not also be concerned with the behaviourism of the Financial Times? I mean FT having such a delicate ego?

Before we need to concern ourselves with the behaviourism and the market, which is quite some nonsense, unless we want to ordain the markets to behave in some special way, we should concerns ourselves with those whose behaviourism could most distort the markets… like the bank regulators.

So, what behaviourism could cause them to regulate banks without defining the purpose of the banks, more than that of being safe mattresses to stash away the cash?

So, what behaviorism could cause them to believe that what bankers perceived as risky was more dangerous than what bankers perceived as safe?

So, what behaviourism could cause them to believe they needed to tilt so much in favor of the public sector so as to assign the sovereign a risk weight of zero percent and to us, We the People, one of 100%?

So, what behaviourism could cause them to believe the world becoming a better place with the banks avoiding taking the risks of lending, like for instance to SMEs and entrepreneurs?

Etc., etc. 

Why do I ask? Because I have sent FT thousands of letters on this issue, and which they have 99.9% ignored, because, though they might say otherwise, they are not without fear nor without favour.

FT, when will you stop lying about “a light-touch oversight of financial markets before the 2008 crash”?

Sir, you write Brussels played no part…in the light-touch oversight of financial markets before the 2008 crash” “Pooled sovereignty has advanced national goals” June 13.

When are you going to stop advancing that notion of a light-touch oversight of financial markets?

In 1988, with the Basel Accord, Basel I, the regulators decided that for the purpose of calculating the risk weighted capital requirements for banks, the risk weight of some friendly sovereigns was zero percent, while the risk weight for supposedly equally friendly citizens, was 100 percent.

With that they started the most heavy-handed statist interventions of financial markets ever.

Banks needed no capital when lending to the infallible sovereign, but 8 percent when lending to citizens.

Banks could leverage equity infinitely when lending to the infallible sovereign, but only 12.5 to 1 when lending to the citizens, those from which the sovereign derives all its strength.

And then, with Basel II, in 2004, the regulators topped up their heavy-handedness by declaring that the risk weights for a private rated AAA to AA was 20 percent while the risk weight of a speculative and worse below BB- rated, one of those banks would never ever dream of building up excessive exposures to, was 150 percent.

And things have not changed significantly. In fact, on the margin, the intervention has become worse.

Was it a light-touch intervention that caused the 2008 crisis to result from excessive exposures to assets allowed being held, against specially little capital? Like with AAA rated securities, or with loans to sovereigns as Greece! No way José!

So FT, when are you to stop lying? It is sure way over time for it. 

@PerKurowski ©