Your Comment is awaiting Moderation.#164. A bolt from the grey Posted on February 28, 2020 WHY “BUSINESS AS USUAL” WILL NOT BE RESTORED

At 10-43 this is the crucial point what is the purpose of the banks, what are the end goals or objectives of Banking or the wider financial system and how do we best regulate with those stated aims in the forefront. Excellent Video.

I have been trying to make a point regarding the opportunity cost of energy available for investment
this is the same point as applied to Basel 2 and Basel 3.

FEBRUARY 26, 2020
Do we need bankers, as in good loan officers, or bankers, as in creative financial engineers?
Sir, I refer to your “Europe’s banks are losing the global race for talent” February 25. In general terms, and most especially with “Banks, like the best football clubs, should nurture their young talent”, I agree completely. That said my concern with respect to all banks, not just European, is about what banks would benefit us the most.

For around 600 years banks allocated their credit to what bankers thought would produce the highest risk adjusted net profit margins, something which required them to consider interest rates and operation costs. In those days good loan officers were of utmost importance.

After the introduction of risk weighted bank capital requirements, banks now allocate their credit to what bankers think will produce them the highest risk adjusted net profit margins adjusted to capital requirements, something which now, besides interest rates and operation costs requires them to consider leverage possibilities. In this new kind of banking creative financial engineers have an important role to play.

I am convinced traditional banking not only satisfied much more efficiently the credit needs of our economies but was also much less dangerous in terms of financial stability than “modern” banking.

But Sir, you don’t have to take my non-PhD opinion on that. In his 2018 autobiography “Keeping at It” late Paul Volcker wrote: “Over time, the inherent problems with the risk weighted bank capital-based approach became apparent. The assets assigned the lowest risk, for which capital requirements were therefore low or nonexistent, were those that had the most political support: sovereign credits and home mortgages. Ironically, losses on those two types of assets would fuel the global crisis in 2008 and a subsequent European crisis in 2011.”

Yes, Europe and the world, of course needs a new generation of bankers, but before that, for our own good, let’s make sure they have the right type of banks to lead.


Doing more with Less. Financialised capitalism is not very good at it. It is a question of adapting the Pricing of Markets in a token which reflects the resources available and their alternative potentials.
The “opportunity cost of Energy invested” as opposed to the energy cost of energy invested.
There are challenges transitioning from Oil to other fuels and also rather a lot of work to do on fuel cells. That said Materials Technology has transformed production capabilities and also many old Technologies have also been repurposed using 21st Century Materials.
Take Stirling engines just for starters. Take Heat Batteries and Heat pumps as another example. Seeds Tim is based upon one variable and that is the Energy cost of Energy as per the experience of the past 100 years. It is a massive assumption on the part of anyone to take the past 100 years as an indication of what the next 100 years has in store.
The Transition to the future, I am in the agreement, will take place over the next 50 years How it will look I have no idea I also know that it is not all bad news.
Bjorn Lomberg on the other perspective.

Doing more with less. Financialised capitalism is not very good at it. It is a question of adapting the Pricing of Markets in a token which reflects the resources available and their alternative potentials.
The “opportunity cost of Energy invested” as opposed to the energy cost of energy invested.

Jonathan Sugarman versus UniCredit – an update

WhistleblowerIRL, AKA Jonathan Sugarman continues to fight UniCredit. One rather impecunious man fighting a trillion euro bank. But Jonathan is nothing if not …well I leave you to fill in the blank.

The update comes via a very good 12th Nov. editorial in Village Magazine in Ireland, “Blowing the whistle so hard it hurts”.

In December 2010 a risk-manager in the Irish unit of UniCredit, Italy’s largest bank, described in Village how in 2007 the Financial Regulator failed to intervene after he first alleged he falsified liquidity-ratio  figures. The risk-manager maintained he was specifically warned by senior personnel at the Irish subsidiary not to report the matter to the Financial Regulator

Jonathan Sugarman blew the whistle on the massive repeated breaches. This magazine received aggressive threats from McCann FitzGerald solicitors on behalf of UniCredit not to publish the information.

To the credit of its publisher and owner, Michael Smith, the magazine has stood by the story and refused to be cowed.  I recommend reading the whole story. You can follow any further developments at Jonathan’s blog.



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