The market reaction prompted officials to remove debt haircuts from the crisis management toolbox - at least for now.
Andersen also acknowledged that its auditors had made mistakes in analyzing another of Enron's special-purpose entities, which the company often used to remove debt from its balance sheet.
Mr. Levin said he would seek to learn more about the company's use of private partnerships formed to remove debt from its balance sheet, an accounting device that may have helped raise Enron's reported earnings in recent years.
Removing debt held by private holders and replacing it with strict obligations to the EFSF could make an eventual restructuring harder, should that prove unavoidable.Whereas excessive public debt in Greece has arisen from years of public profligacy, Ireland's problem has been made acute by the unbearable cost of propping up its oversized and undercapitalised banks.
Berardino acknowledged that Andersen auditors had made mistakes in analyzing another of Enron's special-purpose entities, which the company often used to remove debt from its balance sheet.
An operating company spins off real estate assets with debt that encumbers the property, so REIT spinoffs remove debt from the operating company's balance sheet.
A spinoff announcement would affect the stock price of ailing companies disproportionately more than it would the stock price of healthy companies, and, with poor debt ratings, unhealthy companies have more to gain from removing debt from their balance sheets.
The credit crunch removed this debt engine.
But if the Senate proposal wins the day -- still an uncertainty -- it's far from clear that Obama will have removed the debt limit as leverage even for the remainder of this own presidency.
Thanks to quirks in accounting rules and tax regulations, this arrangement allows the original corporate owner to remove mortgage debt from its balance sheet while still claiming a tax deduction for the interest on the debt.
