The credit rating agencies are private public servants.

Sir Jean-Louis Beffa and Xavier Ragot in “The fall of a financial model” February 22, describe the “present standard model of financial capitalism” as “mainly based on the self-regulation of the financial sector, which alone assesses the risks produced by its financial innovations”. Sorry, in what world do they live?

Currently the most important risk assessments are not provided internally by the financial sector but forced upon it by those outsourced risk-measure government bureaucrats we all know as the credit rating agencies. The fact that these agents are private does not make them less public servants

Gazprom in a public-private partnership?

Sir, in your “Putin’s piste”, July 7, you sort of allude that there might be a public-private partnership between Russia and Gazprom. Nonsense. That is just a public-public partnership that uses private sector flexibility to avoid the constraints that reason imposes on public spending. If Gazprom is anywhere like the Venezuelan PDVSA that I know, then whatever it does beyond their basic oil and gas exploration, production and refining business, is just a way to non-transparently lose or distribute some of their oil and gas profits previuosly made.

What we first need is an insurance that covers the risks of the discoveries.

Sir, Stephen Cechetti argues in “A future of public healthcare for all” July 3 that the advances in genetics and that will be able to provide for better individualized projections of expected health costs will translate into a market failure that will force the private health insurance system into the arms of the public sector. Actually it is not a market failure that will do so since in fact the market could only benefit from knowing more about the risks, it is the market results that will be unacceptable, or at least let us hope so, since if those prognosed as much healthier sneak out from sharing the risks, society could turn much much nastier. For instance, there is nothing to stop a good health prognosis to also influence such variables as the admittance to universities.

Before we put any new safeguard system in place, which will certainly only happen when it is much too late for many, what we most need is an insurance that covers the risks of whatever extra costs we could suffer because of what they discover in our genes, and have everyone subscribe such an insurance, before they are allowed to take any genetic samples

The public private matrix

Sir, strange how terms could seem to evolve! I say this because when reading the title of Gillian Tett’s article “Multi-layered finance a defence against private equity”, April 20, the first thing that comes to mind is who would have thought it possible that FT would imply that some defence against private equity could be needed? Of course, Gillian Tett’s excellent article is perfectly clear what is meant, but then again perhaps using the term “private-private equity” would lessen the chances for confusion, and perhaps even of having it quoted by those who like Hugo Chavez in Venezuela favour the public sector to take control of some private companies. That said, in the matrix of private-private; public-private; public-public; I believe we all agree that the worst, by far, is the fourth quadrangle, that of private-public.

On the article itself, and after we have seen how fairly simple facts such that mortgages should be issued on reasonably sustainable terms were mostly not caught by the rating agencies, perhaps covering it all in some sophisticated multi-layering-finance, contrary to what is said, could in fact make it easier to obtain a credit rating agency’s letters of approval. You see, the worse the tangle, the easier to talk yourself out of it when caught wrong; it is when things are really simple, that the going gets really rough.

The education of your neighbor’s kids is part of your own kid’s education

Sir, Mr Manuel Riesco when arguing “Chile’s experience belies claims of those who believe in superiority of private schools”, February 24 is rightly concerned with “the poorest remaining in the public schools which have deteriorated” but somehow he seems to imply this would be the fault of the private schools, which obviously it is not. As I have always believed that the education of your own children might turn out to be dangerously useless if your neighbor’s children are left behind, I have always been a supporter of public education. Nonetheless, public education can be given through private mechanisms such as the vouchers and so Mr Riesco’s concern should perhaps be why the poorest of Chile have not received a sufficient large voucher to be able to access a private school. And of course this does neither imply that the public schools cannot or should not be good too.