Banks were instructed to abandon risk and compete with pension funds, widows and orphans for “safe” sovereign bonds.

Sir I refer to FT Alphaville “This is nuts — all the eurozone bonds have gone” March 4.

Of course it is nuts. More than 10 years ago, in November 2004, before some egos got in my way, you published a letter in which I stated “bank supervisors in Basel are unwittingly controlling the capital flows in the world…how many Basel propositions it will take before they start realizing the damage they are doing by favoring so much bank lending to the public sector”

And after the crisis left banks with less equity and the regulators with more requirements that has only gotten worse.

The truth is that banks were told to abandon what they usually did and compete with the most risk adverse for whatever little “safe” there was and those “safe” havens are, as a result, becoming more dangerously overcrowded by the day... and those though more risky much more productive bays are becoming less explored by the hour.