Where have you been minister?
Sir Karl-Theodor zu Guttenberg is right reminding of us of the need to be very clear about what went wrong to cause this crisis in order not to unlearn the many good lessons we have indeed learned over time, “A new era of accountable capitalism”, March 25.
But, surprisingly then zu Guttenberg goes on mentioning as a principle that “risk supervision by rating agencies and financial authorities must be strengthened on a global level to prevent the build up of systemic risk”. Where has he been? Does he still not get it? It was the mingling on risk by the financial authorities that got this crisis started in the first place. Like when the financial regulators in Basel came up with the naive idea that a bank could leverage itself 62.5 times to 1 as long as it lent to corporations perceived as AAA or AA- by human fallible credit rating agencies.
But, surprisingly then zu Guttenberg goes on mentioning as a principle that “risk supervision by rating agencies and financial authorities must be strengthened on a global level to prevent the build up of systemic risk”. Where has he been? Does he still not get it? It was the mingling on risk by the financial authorities that got this crisis started in the first place. Like when the financial regulators in Basel came up with the naive idea that a bank could leverage itself 62.5 times to 1 as long as it lent to corporations perceived as AAA or AA- by human fallible credit rating agencies.
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