Bank of England must allow its banks to finance UK´s future and not just make these refinance its seemingly safer past.

Sir, Martin Wolf writes “The job of policy…is to shift the economy on to the better path. This means taking risks.” “Why the Bank of England must gamble on growth” October 25.

For me, more important than that is for the Bank of England to get out of the way of avoiding private risk-taking, like it does when subscribing to Basel’s silly capital requirements for banks based on ex ante perceived risk, more risk more capital (equity) less risk less capital (equity).

That allows the banks to earn much much higher expected risk adjusted returns on equity when lending to sovereigns, housing and the AAAristocracy, than when lending to medium and small businesses, entrepreneurs and start-ups. And that has of course caused havoc in the allocation of bank credit to the real economy… which of course hinders the chances of sturdy growth.

PS. Sir, just to let you know, I am not copying Martin Wolf with this, as he has asked me not to send him any more comments related to the capital requirements for banks, as he understands it all… at least so he thinks… or it just might be that he does only want the public sector to have the right to risk it.