Regulators should not bet our banking system on the pigeons always carrying true messages.

Sir, John Kay writes about “Enduring lessons from the legend of Rothschild´s carrier pigeon” May 29. I would like to pick up on some of the lessons who some, like our bank regulators, have seemingly not learned.

Kay argues “Today, as yesterday, it is differences in perceptions that give rise to trading opportunities” and he is correct. But yet bank regulators insist in trying to reduce those differences in perceptions by forcing banks to heed more the opinions and messages brought by some officially endorsed pigeons, the credit rating agencies.

And in doing so they bet our whole banking system on that the pigeons were always to relay the truth, completely ignoring that our problems, and theirs as regulators, are almost exclusively to be derived from when the news brought by the pigeons happen to be false. Indeed “A damn rum thing, Wellington might have said.”