He writes,

Today’s FT brings the news that “European financial institutions have $235 billion worth of claims on Greek debt, most of which is thought to be in government bonds.” Why do they hold so much Greek government debt? Because the only category of bank asset treated more kindly by the Basel rules than asset-backed securities is government debt, which has a zero risk weight. I.e., no bank capital need be used to buy a government bond. This appears to be the reason that the possibility of Greek default has led to fears of another banking crisis.

The next step is for the politicians to blame the bankers for making those risky loans.