Careful Klarna, or all ecommerce will only take place at 3pm, buyers’ time.

Sir, Richard Milne gives a very interesting recount of the experiences of Sebastian Siemiatkowski, the founder of Klarna, when trying to establish the credit risk-worthiness of buyers in ecommerce, “A Swedish ventures’s new take on ‘buy now, pay later’” March 6.

I would though recommend Klarna to be very discreet about how it communicates facts like that “a purchase made at 3am is inherently more risky than one made at 3pm”. I say this because those genius regulators in Basel might then get the bright idea they should require Klarna to have more capital against guarantees issued to 3am buyers than for those issued to 3pm buyers.

And the final consequences of all that could be that either the whole ecommerce trade system clogs up by all buying occuring at 3pm, buyers’ time, or that Klarna goes belly up when some 3am buyers change their buying patterns, and commit fraud at 3pm, and Klarna then finds itself bare-naked without any capital to cover up with.

If only the Basel Committee had known more about behaviouralism

Sir, Ken Fisher writes: “Humans hate losses more than twice as much as they love gains – a 10 percent loss feels as bad as a 25 percent gain feels good. That´s proven behaviouralism”, “Gridlocked governments are good news for equity”, November 18.

Of course he is right. How sad the bank regulators in the Basel Committee did not consider this when they designed their capital requirements which require higher capital for lending when the perceived risk of default are high, and allows for much lower capital for lending when the perceived risks of default are low. Of course, those regulations, only lent further impetus to the creation of a bank crisis, those which always result from excessive lending to what is perceived as having a low risk, and never result from excessive lending to what is perceived as having no risk.

Thou shall not induce the markets to trust some particular information agents

Sir, in the Life & Arts of October 18, in very small letters, your readers are told they can go to ft.com/magazine for an article on how the credit rating agencies got it so badly wrong… which sort of implies that the human frailties present in the CRAs could somehow be avoided in the future… and so that we could trust the CRAs even more. 

Is the FT building up some defences against an accusation of having downplayed the role of the CRAs in this crisis? Do you not think this article merited to be printed in the Financial Times; when the world is so dumbfounded confronting a financial crisis of immense proportions and the role of the credit rating agencies lies at the heart of it? 

The article “When junk was gold” by Sam Jones is not bad but does not classify as good either, since one cannot understand how he could have left out mentioning how the bank regulators in Basel, in the mid 90s, empowered the credit rating agencies with oligopoly rights in the risk information markets, and thereby elevated exponentially their influence. Sam Jones writes “lawmakers may not have the appetite to go after the rating agencies. 

The world’s financial markets have credit rating hard-wired into them… going to an investor-pays model is probably too big a change to ask for more broadly. American and European market regulators seem happier to push for a much-reformed status quo. 

I am not so sure of this. Just like there are many new regulatory proposals based on identifying and managing the behavioural patterns in the relation between borrowers and lender, there are also many like me who argue that the behavioural patterns between security vendors and investors has to be realigned, and in this respect consider that the number one reform needed, in order not to repeat mistakes that could be even more catastrophic, is for the regulators to avoid empowering any supplier of information in any special way.

Just as I warned against the introduction of a systemic risk in a 2003 FT letter