The regulatory lockout of small businesses and entrepreneurs from bank credit can only guarantee Europe´s and America´s insolvency.

Sir, Wolfgang Münchau writes “Why I remain a pessimists on Europe´ solvency” November 5, and though he speaks about the need for “growth” he fails to mention the current most important sine qua non barrier that must be removed for such growth to occur in a sustainable not stimulus fueled way. And I refer of course to the capital requirements for banks which discriminate in favor of “The Infallible” and against “The Risky”. 

I hold, and I believe few would disagree, that small businesses and entrepreneurs need to have access in competitive terms to bank credit. But currently, because there is such a huge scarcity of bank capital, and lending to these borrowers carries the burden of requiring the most of bank capital, these vital economic agents are for all practical purposes suffering a regulatory ordered lock-out. 

Gentlemen, there is no way for Europe or America to grow themselves out of their current predicament if keeping the risk-adverse regulations that so distort the efficient economic allocation of resources produced by the banks. On the contrary, keeping these can only guarantee Europe´s and America´s insolvency.