Martin Wolf prefers government bureaucrat’s spending money that is not theirs over bankers making loans to SMEs

SMEs and entrepreneurs have less access to bank credit because banks are required to hold more of that scarce bank capital when lending to them, than when for instance lending to the sovereign or to members of the AAArisktocracy. And that is so because SMEs and entreprenuers have been deemed as risky by regulators, even when by being perceived ex ante as risky, de facto makes these borrowers safer for the bank system.

But Martin Wolf has clearly evidenced over the years he is not a slightest concerned with that distortion in the allocation of bank credit to the real economy, something which among other permits the supposedly "infallible" sovereign to have more than the usual preferential access to bank credit.

Now Wolf argues again, for the umpteenth time, that: “It is more important to create a robust financial sector. Yet pressure from the Treasury today seems to be to relax constraints. That may well be far riskier for the UK economy in the long run than modest fiscal deficits.” “Osborne’s desire to cut spending makes little sense” March 4.

I cannot but conclude that Martin Wolf, between bankers making loans to SMEs and entrepreneurs, or government bureaucrats spending money that is not theirs, much prefers the latter. I don’t!

@PerKurowski ©