We believe that government bonds, just like other loans, should be backed with sufficient capital to reflect the risks that they carry. At the same time, a ceiling could be imposed on lending to any one government, just as lending to other borrowers is subject to a limit of this kind.
If, on the other hand, recent trends were to continue, the income gains coming from higher employment may start to feed into stronger demand growth, which would probably lead in due course to higher levels of investment.