Basel Committee, Financial Stability Board, you are dangerously devoid of any common sense

Sir, I refer to Lucy Kellaway’s courageous and important “How insecurity and preening kill corporate common sense” January 19.

Kellaway, from a conversation “with a man who used to be one of the most senior bankers in the UK”, deducts: “Complexity mostly destroyed what little common sense there used to be and regulation has outlawed the rest. Try understanding any bank’s annual report. It cannot be done. Even the senior bankers who put the figures together admit as much. Worse still, try to comprehend Solvency II. If there is anyone reading this who fully grasps the fiendish vicissitudes of these new capital requirements for insurers, I’d like to hear from them.”

And I call it “courageous” because with that she actually implies that her colleagues write about nonsense as if it made sense; or that they do not dare to show they do not understand whether it is nonsense or not.

And I call it “important” because truths need to come out, and powerful nonsense manufacturers brought down, if our children and grandchildren are to stand a chance.

Hear us out you the members of the Basel Committee and Financial Stability Board… little is as stupid and dangerous as the current portfolio-invariant-credit-risk-weighted-equity requirements for banks you concocted. Not only do these not make our banks safer but, worse yet, these distort the allocation of credit to the real economy.

Answer us: How risky can borrowers perceived as risky really be for the banking system? Is it no so that what is really risky for the banking system is what is perceived and treated as “absolutely safe”?

I dare you to debate me on that wherever and whenever. If you feel more comfortable with some support, you can even bring along any FT journalist fan of yours you wish… and I will bring along Lucy Kellaway.