With capital buffers thin, European Banks can’t handle the higher capital requirements for small business lending.

Sir, I refer to Lex’s note on the lack demand for ECB’s TLTRO funds, “Eurozone banks: horsing around” December 12.

It holds: “You can lead a horse to water. You can put water in a tall glass, add ice, a wedge of lemon and a cute little paper umbrella. You can bring the bendy straw right up to the horse’s lips. But if the horse is not thirsty, it will not drink.”… And so “Reluctance to take cheap money gives credence to the bank’s claims that low business lending is down to a lack of demand”.

BUT, “An alternative explanation, advanced by RBS, is that the low take up highlights the bank’s lack of capital. With capital buffers thin they do not want the risk of small business lending”.

CLOSE, but not really so. The truth is that “with capital buffers thin” they cannot handle those much higher capital requirements that comes associated with the supposedly risky “small business lending”.

How many times have I explained to FT over the last few years that the current risk-weighted capital requirements for banks impede the banks to efficiently allocate bank credit? Hundreds!

PS. In my homeland, Venezuela, after 15 years of being a columnist in its most important daily newspaper, I was among the four first to be expelled without thanks, when government agents purchased that paper. That’s how it is, in a country where the government receives directly 97 percent of all the nations exports.

But how does it work in Britain? Can an editor or some other influential person, order those working in a paper, for instance in FT, to ignore the arguments of someone… for whatever reason?