The typical bank is capitalized with equity, long term debt, short term debt, and deposits.

Otherwise, bank runs and debt panics will be rampant.

The link between sovereign debt and bank debt has to be broken once and for all.

Where realistic debt restructuring scenarios indicate capital shortfalls, across the board conversion of bank debt into equity will be necessary.

But there remain little new securitization and bank debt offerings without government backup.

Following that, the restructured bank can be recapitalized by raising new debt and equity.

Only the European Central Bank could implement true socialization of national debt in the eurozone.

Socializing bank debt is both unjust and will result in a future misallocation of resources.

According to Central Bank estimates, total external debt at the end of June 2002 was over 6.4 billion, and domestic debt amounted to 1.7 billion.

Similarly, Guyana will have its debt reduced by more than 8 of GDP. The level of debt relief will be even greater once the World Bank and the African Development Bank finalize their own programs in the months ahead.

Unlike some months ago, now the European Central Bank can intervene and buy troubled countries debt.

History offers countless examples of the misallocation of resources that can result from socialization of bank debt.

The central government is arguably solvent, but a significant chunk of municipal and provincial bank debt seems underwater.

Money market funds from the United States are returning, albeit cautiously, to resume funding of European bank debt.

In 2012, American prime money market funds, which buy bank and corporate debt, were worth nearly 1.5 trillion.

To do the same thing with bank debt could pull hitherto sound economies into the abyss, because bank s balance sheets are much larger than the volume of government debt.

In an ideal world, Europe would deal with its excessive debt burdens through a restructuring of Greek, Irish, and Portuguese liabilities, as well as municipal and bank debt in Spain.

This is the debt relief promised, a promise we must keep at the World Bank and IMF annual meetings.

One Member State asked if a bank could recover the debt of a listed individual from a frozen account.

Almost 80 per cent of Africa's debt is owed to official institutions, about one third of which is multilateral debt owed mainly to the International Monetary Fund (IMF) and World Bank.

Bank bonds could also be reduced and converted into equity, which would both avert a government takeover of banks and prevent socialization of bank losses from causing a sovereign debt crisis.

This is because official capital controls oblige exporters to deposit hard currencies with the People s Bank of China in exchange for freshly printed yuan (usually as bank deposits) or government debt.

Government debt must be restructured. Bank debts have to be converted into equity and, where banks are insolvent, written off.

That means more debt restructuring and more bank closures now, rather than watering down proposals to rein in freewheeling markets.

The first relies on intervention by the central bank in the event of a threat to the sovereign debt market.

US regulators are strongly hinting that they will allow long term debt to default in a bank failure, while affirming that they will find a way to bail out short term debt.

The Central Bank of Uruguay deducted the amount of the sale from Cuba's debt to Uruguay, while the Central Bank of Cuba did not recognize the transaction, deeming it to be a donation, so that in its view, and in its books, the debt to Uruguay remained the same.

The European Union s approach to bank regulation encouraged financial institutions to load up on government debt supposedly a risk free asset.

Such initiatives should include efforts by IMF and the World Bank to develop a debt sustainability framework for low income countries.

A bank crisis tended to increase the debt of Governments because of the need to compensate for bank losses or to recapitalize banks in order to restore stability in the domestic financial system

BEIJING With the likelihood of a contagious sovereign debt implosion and European bank failures greatly reduced by the Greek debt deal and the European Central Bank s lending program, it is time to look ahead.

These countries massive combined bank and government debt the distinction everywhere in Europe has become blurred makes rapid sustained growth a dream.

If she had added that this is a crisis of both sovereign and bank debt, she would have been even more right.

The campaign to forgive Africa's debt was, on the other hand, focused on the crushing debt load owed by African countries to the IMF and the World Bank, who only have money to worry about.

And the absence of a Europe wide fiscal policy creates significant uncertainty about how the European Central Bank would finance itself if it suddenly faced large losses on junk bank debt after a big bailout.

The MDGs also cast a global spotlight on the crippling debt burdens faced by many of Africa s poorest countries, leading to a process of debt cancelation led by the International Monetary Fund and the World Bank.

In the case of Greece, the interest payments apply to government debt held by Greek individuals and institutions, as well as to government debt held by the IMF, the European Central Bank, and other foreign lenders.

These subsidies are dangerous they encourage excessive risk taking and very high leverage meaning a lot of debt relative to equity for each bank and far too much debt relative to the economy as a whole.

Greece s public debt was placed in its own banking system, which is indebted to the European Central Bank via the issuance of euros.

The bank played an important role in financing Canada's war effort during World War II by printing money and buying the government's debt.

Chancellor Angela Merkel has criticized the United States Federal Reserve and the Bank of England for quantitative easing, which has in practice allowed the central bank to monetize many types of government and non government debt.

Moreover, as in Europe today, when Alexander Hamilton proposed a central banking system, the Bank of the United States, alongside consolidation of states Revolutionary War debt into federal debt, the implementation of his sensible plan was imperfect.

Even if some of these losses are offset for the government as a whole (as the central bank loses on its holdings of government debt, the treasury gains in equal measure, because the debt it owes is worth less), the losses on long term private debt holdings are real.

But in bad times, when it is important to keep banks lending, bank capital would automatically be increased by the debt to equity conversion.

The European Central Bank has provided a great deal of emergency liquidity funding to banks, which they use to buy even more government debt.