Reader's Letter Of The Day

From the FT:

Sir, The ease with which banks outwit politicians* is well summarised by Philip Stephens (Comment, January 17).

One central point that eludes politicians, is that any reduced growth coming from higher bank capital requirements can easily be countered by simply having the central bank and government create and spend extra base money into the economy.**

Moreover, the idea that raising capital from about 3% to about 4% (as currently envisaged) will have any effect on growth is a joke given that Milton Friedman and others advocate/d raising the ratio to100%.

Ralph Musgrave, Durham.

* Bankers don't actually outwit politicians, they own them. The bigger parties are just the political wing of the banking movement.

** He understates the case: higher bank capital requirements will have absolutely no detrimental effect on growth whatsoever, so the proferred solution is entirely unnecessary, but hey.