To focus on “the collective good” begins by denouncing the bad distortions produced by bank regulations.

Sir, Gillian Tett calls “eminently sensible advice”, that provided by John Taft arguing that bankers need “to take a more collectivist approach, focusing on the collective good, rather than acting as short term, profit maximizing individualists”, “The benefits of blue-sky thinking” March 7.

Sounds good, hard to argue with the intention of that… but is it really the role of bankers to interpret and decide what is the collective good… especially when even their regulators so completely ignore “the collective good” in favor of some ill perceived short term risk avoidance?

Bank borrowers can be creditworthy but also worthy of credit, and quite often, perhaps most often, they’re not the same.

To focus exclusively on creditworthiness, as regulators do with their risk-weighted equity requirements, causes without any doubt that many, who from a collectivist point of view are really worthy of credit, are excluded from having fair access to bank credit.

If regulators had included in the purpose of banks that of allocating bank credit efficiently to the real economy, they would never ever have come up with current extreme credit-risk adverse regulations.

If bankers really want to focus on the collective good, then they should vehemently protest the distortions regulations cause, even if that means making the dreams of bankers come true, namely being able to earn much higher risk adjusted returns on equity on what is safe than on what is risky.

And if Gillian Tett wants to focus on the collective good, then also she must stop being so silent about regulatory distortions.