Financial Illiteracy: History Repeating Itself

They say that history often repeats itself. I didn't imagine it will be that soon at the Daily Nation business desk. It consistently gets one story wrong while her sister, the Business Daily, initially gets it right but subsequently gets recruited into the bad habit of being sensational. Recall a little while back when I pointed out that whenever a bank borrows - either locally (bond issuance) or internationally (line of credit from an international lender), it is an indication that it has adequate capital to leverage and expand its balance sheet.
On the other hand though, whenever a bank seeks to increase its capital - either through a rights issue or by listing at the stock mart, it is seeking to growth its balance sheet through increasing a liability called capital that will translate into an equivalent asset called credit (loan book); it could also be a move towards meeting some regulatory requirement.
These two actions on the liability side (one, borrowing, and the other, injecting capital) have the the same effect when it comes to the effect on the balance sheet - for they lead to growth. However, they mean different things when one is looking at what they mean with regards to the regulatory requirements. When one is able to borrow, it is an indication that one has met the requisite regulatory  requirement with regard to capital, and not the opposite as the Daily Nation and Business Daily will want you to believe - that one is borrowing to meet capital requirements! Nothing, at least to me, reflects financial  illiteracy than such lazy thought process.
So when the Daily Nation fronts such argument, as it does in today's edition, and the Business Daily gives the same story but taking a more 'reporting' line before they inject some "analysis" about how such move entails "injecting more resources" is linked to capital adequacy, you'd better go by the story of neither.
But I know where the Daily Nation and Business Daily are coming from: no story is juicier that pretending to analyse that a bank is in trouble and so is rushing for a rescue. As I have indicated before, it is akin to seeing a thief behind every bush!