What the world needs is to introduce true diversity in its financial architecture.

Sir, I refer to “The world needs a new fin­an­cial archi­tec­ture” by Michael Krake, the exec­ut­ive dir­ector for Ger­many at the World Bank.

What if, keeping the UN, World Bank and IMF, we instead reform these institutions? As is, these are managed and governed by bureaucracy autocracies. 

November 2004, at the end of my short two-year term as an executive director in the World Bank, FT 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 (sovereigns)? In some developing countries, access to credit for the private sector is all but gone, and the banks are up to the hilt in public credits.”

I had often expressed this at the World Bank Board but, those colleagues who understood what I referred to, and nodded in agreement, could do nothing. How could they, they were nominated by governments and most expected, and needed, to return to the government. What did not exist was real diversity. Not diversity based on gender or race, but diversity based on interests, life experiences and needs. 

Then I often suggested substituting some on the current executive directors with e.g., a plumber or a nurse; or at least to give a place at the board to that migrant community that, by means of its remittances, provided development countries with much more financial assistance than the multilateral financial entities could ever dream to do.

Now 2024, if I had the blessing to again be at that board of directors, I would drive my fellow directors to despair by, over and over again mentioning: “Give me ten seconds, I want to see what my friend ChatGPT opines on this.”

Would, “Without Fear and Without Favour” FT, be willing to publish a letter on what ChatGPT thinks?

http://voiceandnoise.blogspot.com/2006/05/world-bank-needs-to-go-truly-global.html

http://subprimeregulations.blogspot.com/2004/11/some-of-my-early-public-opinions-on.html

@PerKurowski 

Globally concentrating on the knowledge of the knowledgeable, renouncing to knowledge diversity, represents a huge systemic risk.

Sir, I refer to Gillian Tett “Chess in cyberspace: a smart move?” July 26. I am not a chess player, and I have not really been impacted by Fischer and Spassky playing chess on TV, or by “Deep Blue” beating Kasparov... and so I might be out on a limb here.

I agree with Tett that it is sad that globalization of competition has dramatically reduced the possibilities like singing Queen’s “We are the Champions” with true emotion, as clearly “We are the local champions” does not have the same ring to it.

But, it is when Gillian Tett describes how “parents are tapping the most brilliant brains in places such as India, Bulgaria or Moscow, to deliver online tutorials for their offspring via Skype”, that I get most concerned, because it is another example of a global concentration on the knowledge of the knowledgeable, which could in the end lead us to miss out on some really important knowledge diversity.

And frankly let us look at what has happened in the area of bank regulations since someone (not me), decided we should concentrate the most brilliant regulatory brains in the Basel Committee, and these most brilliant brains with too much hubris decided they could act as risk managers for the world, and on top of that decided to delegate much of that role into some few brilliant brains of some few credit rating agencies. As had to be expected, catastrophe ensued!

And now our banks are becoming riskier by the day, as their balances become more packed up with fewer and fewer assets deemed as absolutely safe, and without them being allowed the benefits of diversifying among the risky.

A decade ago, I told my colleague Executive Directors at the World Bank that if, by lottery, they would substitute for one of us with a plumber or a registered nurse, also picked by lottery we would be a much wiser Board. Of course that, in a mutual admiration club, was not too well received… but I still hold it to be true… even to become truer by the day.

The Venezuelan TV station’s closure is an infringement on your human rights too

Sir, the Universal Declaration of Human Rights in its Article 19 states that “Everyone has the right to freedom of opinion and expression; this right includes freedom to . . . seek, receive and impart information and ideas through any media and regardless of frontiers. This makes it clear that the arbitrary closure of a TV station in Venezuela although it affects directly the Venezuelan peoples right to expression, it also impairs any other citizen of the world’s equal human right to access information. This is made especially clear by the fact that the most reasonable proxy for true information that the world knows, is the free and diversified creation of opinions.

In this respect I need to ask whether you could ever be satisfied with a rainforest with only eucalyptuses and red parrots. Of course not! Therefore we need your help to conserve the info-diversity in Venezuela. As the indigenous to this small planet earth that you all are, this is your problem too. You do not need Venezuela to join the list of countries with absence of information, such as North Korea.