This preferential treatment of government bonds as opposed to loans to businesses or households has made banks in crisis-hit countries invest massively in sovereign bonds of their own country instead of providing credit to the private sector.
Furthermore, this  BIS central bankers’ speeches  5  preferential treatment of government bonds robs the no bail-out rule in the Maastricht Treaty, even today, of some of its credibility. And finally, the experience with Greece, amplified by the current discussions, shows that the underlying assumption of government bonds being risk-free is false.