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I agree we should not repress markets but that must include not creating artificial incentives that confuse the markets… such as those amazing low capital requirements allowed for what some human fallible (and therefore prone to be captured) credit rating agencies perceived about badly defined risks of default. The way regulators naively trusted the capacity of determining risks, really took us back to the Middle Ages. In January 2003 the Financial Times published a letter in which I wrote: “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic error to be propagated at modern speeds.”… but the world decided it was better off trusting blindly in what the regulators were up to in Basel. And, apparently, incredibly, it still does.