Pre-empting the bank lobbying

Banks are exaggerating the economic effects of the regulations they are likely to face in the coming years, the economist running an international impact study told the Financial Times.

In a pre-emptive blast before the banks launch their own lobbying effort on June 10, Stephen Cecchetti, chief economic adviser to the Bank for International Settlements, said the banks’ “doomsday scenarios” were based on their assuming “the maximum impact of the maximum change with the minimum behavioural change”

They are assuming they’re not adjusting their business at all to the regulatory reforms and that the result for the economy will be the worst possible,” said Mr Cecchetti.

The Bank for International Settlements, an extremely conservative body which has been far, far too lenient to bankers in the past, does not make comments like this lightly. You have been warned.