Europe's policymakers have been focussed on breaking the link
between banks and sovereigns since the eurozone crisis in 2012,
when Greece defaulted on its debt.
banks’ internal risk calculations are
However, under EU rules, banks remain free to automatically
rate all debt issued by the bloc's 28 member states as risk
free, allowing them to avoid capital charges and understate the
riskiness of their assets. This broad loophole applies
irrespective of whether those...