Chris Giles, can we have a little more respect for the “risky” small businesses please?

Sir, is Chris Giles a Basel Committee regulator? I ask this because the contempt he shows small businesses with respect to their access to bank credit “Boosting bank lending will not turn Britain around” April 11, is in line with the contempt with which bank regulators treat these. 

Any interest paid by someone perceived as “risky”, like small businesses often are, are worth less than the same amount of interest paid by someone perceived as “absolutely safe”. This is so because regulators, for absolutely no reason at all, allow the latter interest payments to be leveraged many times more on bank equity than the first. And to me, that is an expression of pure odious contempt… or imbecility. 

Yes, small businesses might account for only 10 percent of business investment, but in many ways they represent the frontiers of the real economy, and they might very well include those who will be the large and infallible companies of tomorrow. 

Chris Giles writes “Encouraging business lending involves a difficult short-term trade-off between the safety of banks and their willingness to lend”. Not at all! Not lending to the businesses and keeping the real economy moving forward that represents de-facto the most fundamental danger to the banks. I simply cannot understand what brings some to believe that banks can stand there shining in the midst of the rubble. 

Also I bet Mr. Giles would not be able to mention one single bank crisis that has resulted from excessive bank exposures to the “risky” small businesses.