And some say I am obsessive and monothematic about the risk-weighted capital requirements for banks. Hah!

Sir, Patrick Jenkins writes about “banks’ unhealthy obsession with ROE numbers — which can be a recipe for inefficient, potentially toxic short-termism. An obsessional focus on generating high ROE numbers in the boom times drove bank bosses to shrink equity to dangerously low levels, contributing to the severity of the financial crisis” “Regulator plays part in Credit Suisse chief ’s quiet revolution” October 27.

Why? What is unhealthy with trying to generate high ROE numbers in boom times if that is what your shareholders want? If you do not do that they will fire you or the bank will be consolidated into another bank.

And why only lay the blame on “bank bosses” shrinking “equity to dangerously low levels”, when it clearly was regulators who authorized European banks to leverages bordering on 50 to 1? That is if only banks leveraged with what was safe… with what caused the financial crisis.

And what can be more short-termism, than regulating banks without even defining their purpose, and so not caring one iota about if these allocate credit efficiently to the real economy.

And then some say I am obsessive and monothematic about the dangers of the risk-weighted capital requirements for banks. Hah! 

No wonder I have to keep hammering on against that much more generalized monothematic obsession of wanting to blame the banks for all bad that happened and happens… an obsession probably based solely on a deeply held dislike of bankers.

@PerKurowski ©