Basel III: Why bother when the prequel was a “flop”…
…and the warnings weren’t heeded?
The prophetic words in this extract weren’t written post crash but in 2001! The full report can be read here. Of course this was not the only warning.
Well before the banking collapse, the US National Academies/National Research Council and the Federal Reserve Bank of New York collaborated on an initiative to “stimulate fresh thinking on systemic risk”. The main event was a high-level conference held in May 2006, which brought together experts from various backgrounds to explore parallels between systemic risk in the financial sector and in selected domains in engineering, ecology and other fields of science. The resulting report was published late 2007 and makes very interesting reading.
So if the warnings were ignored…why and why have those who ignored them not been punished alongside those who, knowingly, flouted regulations in relentless pursuit of personal and Corporate reward at the expense of all else?
WHO in their right mind thinks for one minute that more, different, regulation is ever (ever) going to be the answer???
More regulation is more complexity, more cost, greater fragility and less customer value…
“…complexity breeds complexity, and is subject to diminishing returns. Eventually the costs of increased complexity exceed the benefits” Prof John Kay