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Sir, Dave Shellock writes that among other, because of the possibilities of Brexit, and because of Fed’s Janet Yellen’s dovish speech, “Sovereign debt demand drives benchmark yields to record lows” June 11.

When will someone try to figure out how much of that demand for sovereign debt has been artificially inflated by regulations? For instance banks are allowed to hold the least capital against sovereign debt, and knowing about the general scarcity of bank capital that must influence its demand very much. And similarly others, like the insurance sector, have been nudged in many ways to hold sovereign debt.

The day banks and insurance company are allowed to hold private sector assets under the same conditions they can hold sovereign debt, then we would be able to know what the free market really indicates.

Sovereign debt, like US Treasury and bonds, are most often used as proxies for the all-important “risk-free rate”. Sir, it is therefore really hard for me to understand why the possibility we might not have a true risk-free rate proxy, because the rate of US Treasuries and bonds are subsidized by regulations, is not of any interest to the Financial Times. It is like a National Geographic not being interested in the earth’s rotation being shifted.

@PerKurowski ©