March 17, 2012

Yes, bank regulators must be held to account for the crisis

Sir, you are absolutely right in that “There has been no proper holding to account for the crisis” “Reckoning delayed is reckoning denied” March 17, as we have yet to see one single bank regulator parading down a 5th Avenue wearing a cone of shame. 

When the regulators allowed banks to hold extremely little equity when lending or investing to what was officially perceived as not risky, and thereby allowed banks to earn extraordinarily large return on equity, they doomed the banks to for them dangerous obese exposures to triple-A rated paper and infallible sovereigns, and equally for us dangerous anorexic bank exposures to what is officially perceived as risky, like to small businesses or entrepreneurs. 

You might be right in that Wall Street has closed ranks around Goldman against Greg Smith’s j’accuse, but you in FT have also closed ranks around the bank regulators, by silencing my over 600 j’accuse letters. Who knows, you might yourself be held to account for that one day!

Occupy the Basel Committee!