Current low interest rates on sovereign debt could, in hindsight, be the highest real rates ever.

Sir, Kenneth Rogoff writes that “with hindsight, yes, the UK could have borrowed more –but we do not have hindsight when decisions are taken”, "Britain should not take its credit status for granted” October 3.

The underlying assumption of that is that current interest rates on much public debt, not only in UK, are very low… and that, in future hindsight, might not be true.

The risk weighted capital requirements for banks favor immensely bank lending to the “infallible sovereign” (and the AAAristocracy), in detriment of the access to bank credit of “The Risky”, the medium and small businesses, entrepreneurs and startups.

And so the cost of public debt which is currently not recorded anywhere, are the most certainly monstrous opportunity costs derived from the distortions in the allocation of bank credit this regulation produces. In fact, it is akin to taking the spark-plug out of the real economy. Yes, our economies might be moving, but perhaps that is only because they are going downhill.