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Ever since John Maynard Keynes contemplated the economic consequence of the peace, economists have been contemplating the unintended consequences of knee jerk politics.

On Wednesday, CBA chairman John Schubert warned regulators against tightening 'already conservative' capital requirements, echoing other senior bank executives recently who have suggested that unintended consequences might include higher costs for consumers and a slower economic recovery.

And unintended spectres haunt the banking system in the US, where new guidelines allow banks to not have to classify as delinquent commercial mortgages that are 'underwater' (asset value < loan value), where the loans are being serviced. Not sure if this means the asset concerned has to 'wash its own face' (ie rents from the asset can service the loan interest), or whether the loan is simply up to date regardless of the source of servicing cash flow, but it means that additional capital does not have to be reserved against the loans in question.

Opponents there are saying that this move will simply create an overhang of problem loans and leave uncertainty in the property market. They say new investors will be fearful of another wave of asset value hits when the overhang is ultimately brought to account. There are also fears that the banks concerned will suffer indigestion for years – ala bad debt debilitated Japanese banks in the nineties – and that as a result new lending will be slow.

Keynes thought the post WWI Treaty of Versailles was a Carthaginian Peace – Carthage was razed by the conquering Romans, and its fields sown with salt.

I don't think any of our bankers are in danger of being sold into slavery by the Feds post-GFC, but I do think that unnecessary tinkering and change for the sake of change is dangerous, and warnings from our major banks should be taken seriously.