Much more important than guaranteeing sufficient capital, is that bank capital requirements do not distort.

Sir, I am amazed. Brooke Masters, Financial Time’s chief regulation correspondent seems to be surprised with what she writes in “The leverage story that banks want to keep under wraps”, April 9.

Sincerely I had assumed, years after the outburst of the crisis, and after so many explicatory letters I have written to her and other at FT, she would have at least known that the risk-weighting of assets dramatically hides the true extent of bank leverage.

And she writes: “Bankers argue that leverage ratio is a crude tool that penalizes basic low-risk products”, which refers of course to those low-risk products which already benefit from lower rates and ample access to finance. Sincerely I hope Masters will now at least understand sufficiently that the current risk-weighted ratios, penalizes what is perceived as “high-risk”, that which is already penalized with higher interest rates and lower access to bank credit.

Sir, much more important than making sure banks have sufficient capital, is to make sure that their capital requirements do not cause distortions in the real economy, and which dooms it to disasters in which not even perhaps a 99 percent capitalized bank could meet its obligations