Should Lord Turner have the right to throw the first stone?

Sir in your “Sustainable banks” October 22 you refer to a speech by Lord Adair Turner in which the chairman of the Financial Services Authority referred to the need for more transparency and less opaque pricing in banking. Right so, indeed… but is Lord Turner the right person to throw the first stone? 

The banks, when lending to those officially perceived as less-risky, like for instance Greece was perceived to be, were allowed to hold much less capital than when lending to those officially held as “risky”, like the unrated small businesses and entrepreneurs in the UK. 

How much in extra interest rates, or in less access to credit, have the small businesses and entrepreneurs have had to pay because of that? Fortunes! Has Lord Turner been transparent about that? 

Has Lord Turner been transparent about the fact that these misguided capital requirements, based on ex-ante perceived risks, are to blame for the current dangerous excessive exposures of banks to what was perceived ex-ante as not risky… and which might even have been turned into risky, precisely because of that regulatory nanny like anti-perceived-risk bias? 

PS. In case you need some reminders, here´s a video that explains a small part of the craziness of our bank regulations, in an apolitical red and blue! http://bit.ly/mQIHoi