Too many creditors were reimbursed at par on their maturing claims.

(h) Recognize existing creditors rights and establish clear rules for ranking of priority claims.

Ideally, bank creditors would not lose money, because their fixed interest claims would be converted into bank shares of similar value.

Similarly, in case of bankruptcy, federal laws and courts readily adjudicate claims among creditors, and do so without regard to state borders.

To enable small creditors to use the financial system, it might be efficient for the government to guarantee (explicitly or implicitly) their claims.

The most noteworthy was the IMF sovereign debt restructuring mechanism,29 which suggested some core features majority rule in restructuring decisions, a legal stay against claims by creditors, protection of creditors' interests, seniority of new money and a dispute resolution forum.

Once it became clear that the burden was unbearable, debt should have been cut expeditiously. Too many creditors were reimbursed at par on their maturing claims.

The crucial issue is the extent to which creditors will have to participate in rescue measures by accepting haircuts that is, partial losses on their claims.

Judgement creditors

To the extent that the value of these assets would not have been sufficient to cover all of the derivative creditors claims, they would have had to bear some losses.

Statutory (preferential) creditors

Creditors in insolvency proceedings

Rather than imposing the costs of the ECB s and EFSF s losses on European taxpayers, the banks creditors could give up some of their claims in exchange for receiving shares from the banks owners.

Member countries are now divided into two classes creditors and debtors with the creditors in charge.

Thus, a second set of policies and institutional reforms requires that all unsecured creditors of banks and other financial institutions need to be treated that is, they must accept losses (or haircuts ) on their claims.

Sovereign debt restructurings with private creditors

As a result, the eurozone has become divided into creditors and debtors, with the creditors in charge of economic policy.

To the extent that the value of these assets would not have been sufficient to cover all of the derivative creditors claims, they would have had to bear some losses. Would that have been an unacceptable outcome?

Even former creditors benefited from this rebound.

Bailing in creditors will exacerbate these trends.

Inflation would clearly make creditors worse off.

And if the liquidation rate for creditors common claims is defined as no lower than that at the time the draft restructuring plan was submitted for approval, compensation must be considered in the event that payment is delayed.

Creditors can agree to relax Greece s fiscal targets.

Second instalment category A claims corrections Third instalment category A claims corrections Fourth instalment category A claims corrections Fifth instalment category A claims corrections Sixth instalment category A claims corrections First instalment category C claims corrections Fourth instalment category C claims corrections

The fourthsecond group of overlapping claims initially consisted of E4 claims related to 39seven category C claims and 24 category C and D claims.

The euro crisis is now turning the EU into something fundamentally different, dividing member countries into two classes creditors and debtors with the creditors in charge.

Because healthy competition among all potential creditors is an effective way of reducing the cost of credit, the Guide recommends that the secured transactions regime apply equally to various creditors, including banks and other financial institutions, as well as domestic and non domestic creditors.

Claims

When push comes to shove, domestic politics trumps foreign creditors.

Price inflation forces creditors to accept repayment in debased currency.

The banks creditors or governments ultimately would bear any losses.

Creditors obviously support bailing out debtor countries to protect themselves.

Creditors of a corporation cannot recover debts from a shareholder.

The average number of loss types is 3.14 for the claims in this instalment, compared with 2.01 for all claims in the regular category D claims programme, 1.93 for Jordanian claims and 1.71 for Kuwaiti claims.

And, even if the banks private depositors, whose claims are 39 of the aggregate balance sheet, were excluded, the debt equity swap necessary to compensate for a loss of up to 100 of the equity would be less than 12 of the creditors investment volume.

They depended much less on foreign creditors than on domestic lenders.

For both borrowers and creditors, the risks and costs are enormous.

Greece, too, is a victim of its creditors misconceptions and taboos.

This limits losses to stockholders and completely protects almost all creditors.

Table 3 Recent sovereign debt restructurings with private creditors main features

Duplicate claims

Even in those states where creditors have the legal authority to take other assets or wage income, the personal bankruptcy laws are so restrictive that creditors don t bother to try.

Concerning the issue of duplicate claims, the secretariat indicated that it was aware of the risk of duplicate claims from the outset of claims processing and took steps to identify and eliminate such claims during the course of claims processing.

review of non overlapping claims in the FOURTHsecond group of overlapping claims

These E4 claims were considered in the second instalment of E4 claims.