March 24, 2015

In order to avoid political extremism, Europe needs to rid itself of bank regulation extremists.

Sir, I refer to Gideon Rachman’s “Growth will not save Europe from extremists” March 24. But there will not be any sustainable sturdy growth in Europe, while the regulation of its banks is in the hands of extremist. Only extremist could, for purposes of bank equity requirements, assign a risk weight of zero percent to central government debt and that of 100 percent to an unrated SME or entrepreneur.

Rachman writes “France and the rest of the member states… need mainstream politicians that can paint a convincing and optimistic picture of the future”. Indeed, and that message should go somewhat along the following lines:

“Europeans, we were horribly sabotaged by regulators who completely distorted the allocation of bank credit. Because of them we lost 25 years but, once we get rid of them, we will be able to resume the creation of the jobs our future generations require and deserve.”