May 04, 2016

FT, why do you keep mum on the greatest austerity of all; the bank regulation ordered credit-risk-taking austerity?

Sir, you write: “Given huge disparities in the bloc, this is no time for more austerity” “A tentative upturn in the Eurozone economy” May 4.

And yet you keep mum about the most serious austerity of all; the risk-taking austerity imposed on banks by regulators and who have these not financing more the riskier future but mostly refinancing the for the rime being safer past.

And truly idiotic it is. Basel II assigned a risk weight of 20% to AAA rated assets and 150% to that rated below BB-. That is like a nanny telling the children to beware of the ugly and foul smelling and embrace more the nice looking gentlemen who offer them candy.

When you have seen how much stimulus has been thrown at the economy without it responding with any seemingly sustainable strength don’t you get curious about why? Or is it that you believe that as long as ECB’s Mario Draghi manages to hit an inflation target everything is going to be fine and dandy?

@PerKurowski ©