a An option was included to convert US 30 year bond into a US 12 year bond with debt reduction.

Moreover, virtuous creditors should not bail out irresponsible borrowers, be they private or public.

Instead of enforcing the no bailout principle and establishing a precedent, debtor countries used official loans to repay private creditors.

Haiti's external debt represents more than 1 billion with an accumulation of arrears towards multilateral (US 1,091.30 million) and bilateral (US 209.10 million) creditors (see table below).

Thus, the Guide proposes procedures that allow creditors to so enforce their security rights, subject to judicial or other official control, supervision or review when appropriate.

Creditors were protected and financial sectors losses were transferred to the domestic government (as in Ireland) or to the European Central Bank (as in Greece).

Indeed, if official funding were junior, it would be providing a larger cushion to private creditors and thus bailing them out to an even greater extent.

Six months later, after substantial official funds had been used to pay private creditors, the outstanding private debt was substantially restructured.

In the end, debt relief has a positive impact on a country's balance of payments, as the Government transfers fewer resources to foreign creditors, but does not ease the budgetary burden faced by the Government.

In the process, a basic principle of modern capitalism that when debtors cannot pay back creditors, a fresh start is needed has been overturned.

For example, the state has granted a 4.2 billion loan to the aluminum magnate Oleg Deripaska (who held first place on the Forbes list before the crisis) to pay off Western creditors.

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.

Greece will require another official bailout or a bail in of private creditors, an option that is fueling heated disagreement among European policymakers.

Initially, the most appealing argument for his plan was that it would provide greater security to creditors, and thus reduce interest rates, from the 6 at which the states financed their debt to 4 .

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.

Thus, the Guide proposes the establishment of a system for registering public notices with respect to security rights and, based on that system, clear rules that allow creditors to determine the priority of their security rights at the outset of the transaction in a reliable, timely and cost efficient manner.

The decision to expropriate 51 of YPF, Argentina s biggest energy firm, from the Spanish company Repsol is one of those gestures. Added to its contempt for foreign creditors, and to the growing and arbitrary protectionism that violates all global and regional rules, President Cristina Fernández de Kirchner s decision pushes Argentina closer to being deemed internationally as a lawless country.

Yet another concern is that in some cases secured creditors may take most or all of a person's assets in the case of insolvency and leave little for unsecured creditors, some of whom are not in a position to bargain for a security right in those assets.

The politicians prefer to postpone the inevitable by putting public money where private money will no longer go, because doing so allows creditors to maintain the fiction that the accounting value of the Greek bonds that they hold need not be reduced.