What if ideas on more productivity were evaluated strictly based on the CVs of those originating these?

Sir, I refer to Sarah O’Connor’s “Want your staff to do more? Just listen to them”, September 28.

Let us suppose you are sitting around a table with all your employees, to hear their suggestions of how to improve productivity. And you also have in front of you their respective CV’s.

And now let us also suppose your boss tells you: “If you find a good idea presented by those having a Master degree or more, I will triple your salary but, if you find that idea among those with less qualifications, you will only get a 10 percent raise.” What will happen?

I ask this because, in terms of bank credits that could lead to more productivity, that is precisely what bank regulators, with their risk weighted capital requirements for banks, are telling the bankers. “If the good idea comes from one AAA rated, you will be allowed to leverage a loan to him much more, meaning you could earn a much higher expected risk-adjusted return on equity, than if that good idea came from an SME or an unrated citizen.

Capisci Sarah?

@PerKurowski ©

What is the use of a perfect banking union among imperfect banks?

Sir, on March 24 you refer to “A highly imperfect banking union”, but leave out what is the most important fact, namely that this union is among imperfect banks. That Eurozone banks and sovereigns remain tightly embraced”, as you subtitle it, has less to do with a flawed union and much more to do with fact that regulators allow banks to lend to the European sovereigns holding much less capital than when lending to other European unrated borrowers.

And such regulations as you should understand, makes it impossible for banks to allocate bank credit efficiently.