Our bank regulators, the Basel Committee, imposed what I have always considered to be stupid purposeless and senseless capital requirements for banks based on the risk of default perceived by the credit rating agencies. Those capital requirements pushed the banks to drown themselves in private triple-A rated waters and some well rated sovereigns. Knowing the trillions of losses incurred because of that not a day goes by without wondering about what would have happened if those capital requirements had been based on sustainability and job creation potential? Surely we would have had a crisis from meddling that way with the banks, but, that meddling, would at least have served a better purpose than the current one.
