February 02, 2011

Those at the nucleus may not even know they´re there.

Sir, John Kay writes that “Those at the nucleus may not have the best view” February 2. Indeed, but that is so much worse, when those at the nucleus are not even conscious they´re there.

For instance the Basel Committee which with such hubris took upon itself to act like the risk-managers of the world, assigning the risk-weights that determines how much capital the banks need to hold for different assets, according to their credit ratings, is not even aware of that by doing so it determined Ground Zero for other risk-managers; and continue therefore to complain about the ability of bankers.