When compared to how risk adverse bank regulation help overcrowd safe havens, Brexit is but a small blip.

Sir, Gillian Tett writes about how the negative-yielding sovereign bond pile keeps swelling and argues that as a consequence “asset managers and insurance companies will see their earnings slide unless they start buying more risky debt — which will bring dangers of its own” “Now watch the shift in interest rates” July 1.

It is not “risky debt” that poses the largest risks, it is excessive exposures to what is perceived as safe that does. Just as Voltaire meant with his “May God defend me from my friends [AAA rated]: I can defend myself from my enemies [BB- rated]”

The current risk weighted capital requirements for banks, which drive banks out of what is ex ante perceived as risky, and into what is ex ante perceived as safe, only guarantees the safe havens to, ex post, become dangerously overpopulated; and the risky bays, equally dangerous to the real economy, to remain unexplored.

How many letters have I not written to FT over the years explaining that?

@PerKurowski ©