Senator Richard Shelby. Ask Fed and FDIC, why Alabama’s borrowers are denied a fair access to bank credit.

Sir, I refer to Barney Jopson and Caroline Brinham’s “Republican resist global insurance role”, April 29.

Richard Shelby, chairman of the Senate banking committee is quoted with: “An international regulatory regime should not dictate how US regulators supervise American or US based companies”.

It is a quite relevant opinion, but Senator Shelby should start by asking the Fed and the FDIC the following:

Why on earth are Alabama’s state-chartered banks allowed to lend to well-rated corporations elsewhere, or to sovereign governments, holding less equity than when lending to their own local SMEs and entrepreneurs?

Does that not enable sovereign governments and members of the AAArisktocracy to generate higher risk adjusted returns on bank equity than what Alabama’s borrowers can do?

Does that not mean that Alabama’s borrowers are refused fair access to the credits of their Alabama banks?

Senator Richard Shelby faces a hugely important challenge. But he should know that challenge extends way beyond the insurance sector and the Financial Stability Board. He should start with banking, and with the Basel Committee, that committee that so much influences US bank regulations, but that is not even mentioned once in the over 800 pages of the Dodd-Frank Act.

@PerKurowski