The conclusion is that creditor duties, or wrongful trading rules, are superfluous, while private solutions are still inadequate to solve all the agency problems in a way that the proponents of both types of creditor protections aim for.
Local officials who want to cut pensions do not, as a rule, want to shortchange their bondholders for fear of not being able to borrow in the future — yet bankruptcy law requires that both types of creditors be treated equitably.
"This is quite a significant step to impose losses on any sort of senior bank creditor," said Alastair Wilson, chief credit officer at Moody's Investors Service, who views depositors as a type of senior creditor.
"There will probably be a credit event," he said of the likelihood that credit-default swaps, a type of insurance against creditors reneging on their loans, will be initiated — a signal that Greece is technically in default.
Within each type of stakeholder — again, creditors and shareholders — there can be many different tiers, but here we'll focus just on the seniority structure of shareholders.
In addition to making it harder to file for bankruptcy, the bill effectively rearranged what types of payments creditors could seize during the bankruptcy process.
The credit summary includes the name of the creditor, the type of credit installment such as a mortgage or revolving such as a department store charge account.
Ireland, as the bailout recipient most accepting of the need for economic retrenchment, has been seen as a laboratory for the type of austerity measures favored by some creditor nations like Germany.
Each creditor is owed a different percentage based on the type of loan it gave and which division the creditor gave it to.
