A nice hint from Turner at goings-on in the gentlemanly world of banking regulation. He is discussing the relative merits of formulaic capital adequacy requirements - Pillar 1 of Basel - and requirements made at the discretion of the regulator (Pillar 2).
"Under a formula-driven system, the required level of capital would vary according to some predetermined metric ... a pre-set discipline not dependent on judgement and not subject to the influence of lobbying" (p.61)
Lobbying, eh ? Doesn't sound like a hypothetical concern. So - to what lobbying has our independent regulatory system been subject ? Has Gordon Brown been down there over the years, pressing for higher discretionary requirements ?
Surely the bankers haven't been trying to negotiate their capital adequacy with the FSA ?
... have they ?