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If a company is not generating significant profits and has no imminent prospects of doing so, creditors do not want to reschedule loan payments or swap debt for equity, Mr. Miller said.
For example, its member companies will refer people to free debt advice services, and will reschedule loan payments if customers cannot afford to pay them.
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Yet securitisation has made it harder to reschedule loans and nobody knows how far house prices will fall.
Brazil is facing its most serious market crisis in three years and urgently needs to bring in more foreign earnings to help it service $250 billion in public debt and allay market fears that it may have to reschedule loans or default on them.
Fixing corporate balance sheets by rescheduling loan payments and converting debt to equity went a long way toward solving problems.
New rules on accounting for rescheduled loans may mean an extra €10 billion in provisions.
The repayment rate of rescheduled loans, known as flexible loans, is currently over 98percentt.
No longer is it only company executives and their bankers that sit round a table rescheduling loans.
One reason for the banks' rage was the failure of their plan to make their rescheduled loans senior to Marconi's bonds.
These include allowing farmers to defer some of their payments, providing low-interest loans to help farmers improve their cash flow, combining loans at new rates and terms and rescheduling loans.
The banks, he said, should get much tougher, denying credit to nonviable companies so that they exit the market, while subjecting distressed companies to debt write-downs as opposed to rescheduling loans.
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