KNOWING OUR BOUNDARIES: we are clearly exceeding our planetary boundaries, ref my earlier blog on Malthus, Marx and Murphy (12 October 2015!). But the issue of knowing your boundaries is much broader, including the financial sector.

Strategic boundaries for banks are even more relevant in the context of the explicit or implicit backstop of society in case of bank failures. In my view, the strategic boundaries in particular of "system-banks" should be set by the direct interest and the real economy of the "home-country/ies" of such bank.

So look at trade and investment flows of outbound and inbound clients in such home-country. Why take a significant, long term risk on a foreign sovereign or banking system if this has no relationship with the better functioning of the real economy in the home-country. Why not invest in (green) innovation in your own home country rather than have significant sovereign bond oriented investment portfolios in countries which are not core to the real economy of your home country?