May 03, 2016

The Basel Committee’s and FSB’s bank regulators, seems to fit well the description of a Japanese “salaryman”.

Sir, Leo Lewis writes “in 2016, the [Japanese] salaryman — unassertive, allergic to risk and with a growing list of corporate debacles to his name — has switched from asset to liability. To economists who see labour market reform as Japan’s only hope, it ranks among the country’s most insidious threats”, “Curse of the salaryman” May 3

And Koichy Nakano at the Sophia University in Tokio holds that men working in offices tied to group think and respect for authority, “is the very opposite of the creativity and original behaviour that the economy needs at this point”

So what are the key words here? Risk aversion and groupthink.

Sir that is precisely two of the most usual key words I use when commenting on the Basel Committee for Banking Supervision’s and the Financial Stability Board’s work on regulations.

And on "debacles"... what about the 2007-08 crash, which resulted directly from regulators allowing banks to earn much higher expected risk adjusted returns on equity on assets perceived, decreed or concocted as safe than on assets perceived as risky.
Could it be that Mario Draghi, Stefan Ingves, Mark Carney and other BCBS’s FSB’s experts are “salaryman”? Well, if not, they are at least clearly not assets but liabilities. 

@PerKurowski ©