A “Knowledge” bank might think that assets perceived as risky could be risky for banks. A “Wisdom” bank understands that what could be especially risky for banks, and for bank systems, is what is perceived as safe.
A “Knowledge” bank might think that it is great for banks to avoid taking risks.
A “Wisdom” bank knows that the most important function for banks is to take intelligent risks on behalf of society.
A “Knowledge” bank might agree with the Basel Committee’s bank capital requirements based on perceived risks.
A “Wisdom” bank would think much more in terms of not distorting credit allocation, and, if that’s not possible, in terms of capital requirements for banks with a purpose, like on perceived chances of fostering human and natural capital wealth
A “Knowledge” bank, if it has to distort the allocation of bank credit, might agree with bank capital requirements against sovereigns based on credit ratings.
A “Wisdom” bank, in such a case, would much more prefer to base the bank capital requirements on a good governance index.
A “Knowledge” bank might say: “We know it all”. A “Wisdom” bank, would understand “We know Jack shit!”
Or, if aspiring to becoming the “Wisdom bank” sounds too haughty, the World Bank it should at least aspire to be “
The Common Sense” bank.
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