The authorities will have welcomed the pullback from the sovereign risk.

This has led to a range of unintended consequences that have the potential to become sovereign risk if not adequately managed.

If they don't, people won't treat China as sovereign risk and will demand more security.

Q. How has this de-emphasis on sovereign risk influenced your investing approach?

Many countries faced sovereign risk in the late-2000s global recession.

But it would be another "domino" falling and remind investors that sovereign risk in the Euro-zone is a live issue.

For a long time the perception was that the creation of the euro meant sovereign risk was effectively the same across all countries.

Can bond yields rise on "sovereign risk" even as core prices grind lower towards deflation?

In my view, a sudden and massive re-pricing of Western sovereign risk will happen much sooner than is widely expected.

Right now, investors are increasingly focused on sovereign risk.