Should Bondholders be Bailed Out?

It is not surprising that bonds issued by the European Financial Stability Facility (the eurozone s rescue fund) are trading at a substantial premium over German debt.

Some of the benefits of a government policy that induces bondholders to insist on stricter terms when financial firms take larger risks would not be fully realized if bondholders believed that the government might protect their interests in the event of a bailout.

Saving France, Saving Europe

But rescuing banks is not the same as rescuing the euro. Moreover, rescuing the euro is not the same as rescuing the European project.

Saving Resources to Save Growth

In order to stop these securities downward slide and thus to save itself the ECB bought these government bonds and announced that, if need be, it would do so in unlimited amounts.

The Battle of the Bonds

For example, bondholders were fully covered in the bailouts of AIG, Bank of America, Citigroup, and Fannie Mae, while these firms shareholders had to bear large losses.

But, while these considerations provide a basis for providing full protection to depositors and other depositor like creditors when a financial institution is bailed out, they do not justify extending such protection to bondholders.

And the local seabird rescue center, named SANCCOB, immediately launched a massive rescue operation and this soon would become the largest animal rescue ever undertaken.

Saving the House

Saving Ukraine

Rescuing a Revolution

Rescuing Annapolis

Rescuing Yemen

A rescue mission

Bond lending involves diversified groups of bond holders, including domestic residents, and can be issued under different jurisdictions.

Bond offering

The new bonds, other than those governed by Argentine law, will include Collective Action Clauses (CACs).

Saving Central America

Saving Global Order

Saving General Petraeus

Saving Syria and America

Saving the Egyptian Revolution

Saving the Greek Sinner

The Price of Saving a Tree

As a result, the administration has confused bailing out the bankers and their shareholders with bailing out the banks.

America s Bond Market Blues

Italy and Greece, in particular, face serious debt issues amid financial market concerns about the possibility of default or their leaving the euro zone.

Saving Greece, Saving Europe

Saved by Taxes

Saving Public Sarkozy

Saving Europe s Real Hegemon

China s American Bailout?

Team trying to rescue the elephants.

Portugal needs a new rescue program, and Slovenia could soon be asking for a rescue as well.

Indeed, not even the risk of receiving nothing ensures that bondholders will not revert to the old bonds.

For example, the Republic of Korea has undertaken measures to encourage the issuance of bonds by SMEs.10 One objective of the Asian bond market initiative11 is to increase bond financing options for smaller companies in Asia.

There was a lot of bank rescue in economic stimulus and there was a lot of economic stimulus in rescuing banks.

First, they could clarify the pari passu clause, specifying that it guaranteed comparable treatment for existing bondholders, not for existing bondholders and earlier bondholders whose claims were already extinguished.

Why Finance Can Save the Planet

Why the Greek Bailout Failed

Can Yemen Be Saved?

Can Russia be Saved?