Wimps! Should our banks be as safe and useless as a mattress stashed away in Fort Knox?

In “Protecting finance from its demons”, April 26, you hold, we face the choice of “protecting the economy from finance” or “protecting finance from the economy”. May I ask, and what about finance helping the economy? Is that not what finance is supposed to be all about?

You quote Paul Tucker, the Bank’s deputy governor for financial stability saying that this “prevails where the financial system is sufficiently resilient that worries about bad states of the world do not affect the confidence of the system to deliver its core services to the rest of the economy”. Yeah, yeah, great sound bite, but… which are “its core services to the rest of the economy”? Mr. Tucker and his colleagues should first be clear about that, before regulating, so that our banks do not become some useless mattresses stashed away in a Fort Knox.

In the whole regulation literature produced by the global bank regulators we know as the Basel Committee, there is not one single word about the purpose of the banks, and anyone regulating something without defining its purpose, has no idea about what he is doing.

PS. The original link to this FT editorial does not appear any longer.