After banks have placed assets on their balance sheets, they are de-facto “after the curve”

Sir, Gillian Tett with respect to the difficulties posed by a possible drop in the oil price write that “now [regulators] are keen to show they have learnt the right lessons from last decade’s crisis — by getting ahead of the curve and forcing banks to be tough”, “The tangle of loose lending to tight oil” October 16.

Getting ahead of what curve? In the case of bankers after they have placed the asset on their book they are already de facto after any curve that is going to be thrown at them.

What is it with these statists? They abhor fiscal austerity and they love lots of QEs and minimal interest rates, but they do instruct banks to be austere… and regulators have many adoring fans cheering them on.

Why do regulators require banks to act be pro-cyclical and not counter-cyclical? If when oil were over $100 per barrel, banks would have stopped putting oil related loans on their balance sheets… that would have meant, quite correctly, “getting ahead of the curve”.

When will regulators learn… or it is just so that they just refuse to learn? 

PS. How long will we have to live with dumb regulators who make banks clear for ex ante perceived credit risk in their capital... when that is about the only risk banks have already cleared for, with interest rates and amounts of exposures? 

@PerKurowski ©