To measure the real costs of bank credit look at those 100 percent risk weighted. The sovereigns are subsidized

Sir, when Peter Spiegel writes about Italian and Spanish borrowing costs are at the lowest levels since the euro´s launch, I presume he refers to the borrowing costs of the sovereign Italy and Spain. I say this because I am sure of that if he went down to the poorer quarters where the Italian and Spanish small businesses and entrepreneurs hang out, he would, at least in relative terms, find a quite different reality, “The eurozone won the war – now it must win the peace” May 17.

One of the current problems is being able to separate the effects from real lower risk appreciations of sovereigns, from the subsidies that much lower bank capital requirements when lending to them imply. In these days of extreme bank capital scarcity the low rates paid by sovereigns might hide the fact that other borrowers have to pay higher rates or do not get access to bank credit at all.

As I see it the eurozone has won no war… it has not yet even discovered who one of the real enemies is, namely that absurd and dangerous risk aversion introduced by its bank regulators. Real peace in Europe, besides other requires throwing away the whole concept of risk weighted bank capital requirements.