Even before a junk designation, though, the lower ratings will make it more difficult for Spanish banks to use the government bonds they own as collateral when seeking fresh loans from the European Central Bank.
Even before a junk designation, though, the lower ratings will also make it more difficult for Spanish banks to use the government bonds they own as collateral when seeking new loans from the European Central Bank.
Property rights help create prosperity because they allow people to use what they own as collateral.
Mr. Mallayev's lawyer said that he owned land as collateral, and protested that $20,000 would have covered just two payments.
Some companies have suspended trading because they have used their own stock as collateral for loans and they want to "lock in the value for the collateral", said Christopher Balding, a professor of economics at Peking University.
But both lenders he was negotiating with demanded that Mr. Kumar put up equity in his own home as collateral.
It is part of a plan unveiled in May by Chung Mong Hun, the chairman of the Hyundai Group, to use his own wealth as collateral in a $1.5 billion bailout.
He faxed a new proposal to the board late that afternoon offering his own stock as collateral until he could get the loan.
A director famed for being able to get a multimillion dollar project off the ground with only his own name as collateral, he clearly knows the value of pre-existing brands such as Hinduism.
The bank said it did not accept its own shares as collateral for loans; other than that, nothing is known publicly about the arrangement between Mr. Ebner and the bank.
