When regulators layer their concerns with risk on top of bankers’, the “risky” (SMEs), get no fair access to credit.

Sir, Wolfgang Münchau writes: “The link between a government buying bonds and a company in Sicily creating local jobs is long, indirect and uncertain… The truth is that we just do not know the impact of QE until we collect evidence of how the policy transmits to the real economy”, “The success of eurozone QE relies on a confidence trick”, March 24.

I am not entirely sure it was Münchau’s intention, but that translates directly in the question of: Do Mario Draghi and his colleagues have any idea of what they’re doing?

On that Sir, you know my opinion: No! They don’t… as evidenced by their acceptance of credit risk weighted equity requirements for banks that so dangerously distorts the allocation of bank credit to the real economy.

Here Münchau insists in the popular mantra of “Investors will only invest in plant and machinery if they see a rise in demand”. But, that covers only one type of investors, since there are other who believe, foolishly or not, that what they want to do, would help to create demand… and, as they say, those are the tough ones we need to get going, when the going gets tough.

Unfortunately this type of investors, SMEs and entrepreneurs, would need fair access to bank credit, that which is currently denied them, on account of regulators layering their concerns about credit risks on top of bankers’.