In 1999 in an Op-Ed I wrote “The possible Big Bang that scares me the most is the one that could happen the day those genius bank regulators in Basel, playing Gods, manage to introduce a systemic error in the financial system, which will cause its collapse”

And in 2003 in al letter published by Financial Times 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. Friend, please consider that the world is tough enough as it is.”

And bank regulators foolishly decided that the capital requirements of banks, those which are set to cover for “unexpected losses”, were to be determined by the same information used to estimate “expected losses”. And with that they introduced a systemic error that not only makes it impossible for banks to allocate credit efficiently in the real economy, but also makes certain that when a bank crisis explodes, banks will have less capital than normal to cover up with.

And this distortion has been ignored by the Central Banks and by basically the whole academic financial community.

http://subprimeregulations.blogspot.com/2013/04/cfa-revoke-any-certific…

I am curious to see whether this is even mentioned in the forum.