Bank regulators got it so wrong; that we owe our children a full independent autopsy of how that could have happened.

Sir I refer to Nouriel Roubini’s “Rating agencies still matter — and that is inexcusable”, August 11.

Of course it is inexcusable: In January 2003, then as an Executive Director at the World Bank, FT published a letter in which I wrote “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic error to be propagated at modern speeds. Friends, please consider that the world is tough enough as it is.” And, of course I was referring to the intention of the Basel Committee of using credit risk ratings to set the capital requirements for banks.

And of course we need to get rid of those capital requirements that distort completely the allocation of bank credit to the real economy. That these are based on the same perceived credit risks that are already cleared for by banks with risk premiums and size of exposure, is sort of something mindboggling dumb.

But more than that, much more than that, we need a full detailed autopsy of how it came that basically the whole world’s banks ended up governed by such nonsense. And more than that, much more than that, we must also figure out how we have allowed so much time to go by without correcting what clearly needs to be corrected.

As I have said before, the world faces many problems, but since the solutions to those problems are becoming more and more globalized, their possible unexpected consequences can be so much more serious.

If for instance we allow helping our planet to be more sustainable avoiding global warming to go through the same type of flawed decision processes, we might only make more certain we’ll be toast.

@PerKurowski