Anat Admati. Forget about 20 to 30 percent of bank equity, it will not happen in our world and in our time.

Sir, of course, most of us would like the banks to have the 20 to 30 percent of equity, for total not risk weighted assets, which Anat Admati recommends. "Higher equity level for banks not such a bitter pill" September 17.

But why do we discuss an impossible? Does Admati not understand how many trillions of Euros in bank equity would have to be raised only in Europe? The sole mention of 20-30 percent scares all new bank equity away.

If a more modest, and I believe also quite reasonable goal of 8 to 10 percent was set, in a credible way, then that goal could perhaps be reached, especially if governments, as they should, since the undercapitalization of the banks is entirely their Basel Committee´s fault, helped along with some special tax incentives to bank equity.

And the above does not even begin to consider the tremendous reallocation of bank assets that would have to take place; since the assets a 30 percent capitalized bank wishes to hold are completely different from what than the current 3 percent capitalized banks have.

But, on the real positive side, let me assure you that just getting rid of the distortions produced by the so foolish ex ante perceived risk-reweighting, would make for much safer banks and would allow these to allocate financial resources much more efficiently in the real economy.