I do not, like Martin Wolf, congratulate IMF for a job well done in Tokyo.

Sir, Martin Wolf, in “The fund warns and encourages”, October 17, congratulates the IMF for a job well done. I absolutely do not. 

IMF, in Tokyo, again lost an opportunity to warn the world that regulations that give banks incentives to stay away from taking manageable risks on The Risky, like small businesses and entrepreneurs, and to instead take unmanageable risk on The Infallible, like anything AAA rated or the “absolute safe” sovereigns, is immoral, stupid and dangerous. 

Immoral because of how they favor the access to bank credit of “The Infallible”, those already favored by markets and banks, and discriminate against that of “The Risky”, those already discriminated against by banks and markets. 

Stupid because never ever have those ex-ante perceived as risky caused a major bank crisis. 

Dangerous because these regulations distort and thereby hinders the banks from allocating economic resources efficiently. 

What the world most need now is to draw a workable plan of how to get back to regulatory sanity… and IMF should be encouraging and helping it to do precisely that.