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Due to the delay Iceland found itself caught in a classic catch-22 situation, loans from other countries could not be secured until the IMF program had been approved.
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Lenders have an increasingly attractive alternative for people in this situation: renovation loans.
In this situation, the loan contract has the characteristics of an American option.
Goldfarb: This change is interesting because it helps work out situations before loans default but also further highlights the conflict between the super-senior (debt) holders and the B-note owners, who are often the special servicers.
Except for some protections from bankruptcy in a few situations, the loan is just a vanilla closed-end consumer loan.
"The No. 1 reason we entered the whole review of the student loan situation was reliability, to make sure that loans will be available regardless of the credit markets," said Robert Shireman, the deputy under secretary of education.
The World Bank took advantage of this situation to provide loans to the ministries of health and social security funds.
By comparison, the highest estimates of the bad-loan situation in Japan, where banks have been in desperate straits for a decade and are very slow to write loans off, put the size of the problem at 15percentt or less of outstanding loans.
"The nonperforming loan situation is bad and getting worse".
With a spate of van Gogh exhibitions poised to hit the boards soon, the international loan situation must be tight.
Late Thursday afternoon, I caught up with Senator Dodd, and asked him what he was going to do if the loan situation didn't improve.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com