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By Michael Gordon
Published: January 6 2010 17:04 | Last updated: January 6 2010 17:04
In recent weeks, some market commentators have asked a question that would once have seemed unthinkable. Should government bonds still be viewed as risk free? If a negative answer is anywhere near possible it has huge implications.
The question has become more urgent following the recent credit downgrade of Greece on concerns over its public debt burden. The broader debate has focused upon banks and their holdings of Treasuries, gilts and the like as Basel I assigns a zero risk weight to government bonds "“ the assumption being that they are without risk. But what are the implications for the other holders of government debt?
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