The AAA and AA rated are especially exposed to bank regulations that endanger their future.

Sir, Eric Platt quotes Nick Gartside of JPMorgan with: “In a way, double A has become the new triple A, when you have a lot less triple A debt out there,”“Triple A quality fades as groups embrace debt” May 24.

But, in terms of the risk weights imposed on banks with Basel II, triple A and double A have the same one, 20%. A+ to A has 50% and then all the rest jumps to 100% or more.

Like Platt writes many factors affects the disappearance of Triple A. But, the distortions produced by allowing banks to leverage more when lending to the safe, than when lending to the risky, cause the banks to pester and tempt “the safe” for business. And that guarantees that too much bank credit will be given in too easy conditions to the safe… and that will, sooner or later, endanger the safe (and the banks). C’est la vie!

@PerKurowski ©