The Dutch Euromast was modern and imposing when it was built in1960, but now looks small and outdated compared to the brand new Sky Tree in Tokyo, the second-tallest building in the world at a height of 634 meters.1 The Euromast would also be dwarfed by the 492 meter Shanghai world financial center or the 509 meter Taipei 101.
Banking regulation should acknowledge this fact once and for all. Capping the size of individual sovereign exposures in bank balance sheets would provide much of the diversification benefits that are envisaged by the European Safe Bond proposal the European Commission has recently taken up.