From a macro-prudential perspective, two objections can be levied against this, on the surface, compelling statement. First, it may strive for too much; second, it may deliver too little. It may strive for too much, because the occasional failure of individual institutions is not the problem.
The financial crisis has shown that there is no risk-free asset. This includes government bonds. The incentives set by the regulatory framework have to be aligned with this insight. Obviously, this is not only a European issue. The solution has to be global.