Complete truths are the best compasses

Sir as usual Gillian Tett has written a good article in “Lost through destructive creation” March 10. Having said that let me express two complaints. The first one is that when she writes “the banks were making such fat profits they had little incentives in questioning their models” one gets the impression that all or at least most of the banks were involved in the production of opaque assets and that is simply not true, the real culprits, they were few.

What also disappoints is the unwillingness of Tett to connect the dots between the opacity of the innovative financial instruments and their immense marketability. That is not merely explained by the fact that these instruments were awarded AAA ratings because for that to matter the credit rating agencies had to be invested with enormous amounts of credibility, and this is what the financial regulators erroneously supplied them with.

If we are more willing to bare all things as they really are and assign the responsibilities where they should really be then we might discover that we are in fact not that lost.