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It was hard to resist a Borat title...
Good piece from Gillian Tett about how Kazakhstan has been able to impose haircuts on bond holders:
http://www.ft.com/cms/s/0/050d003a-6...44feabdc0.html
"Until recently it was generally assumed in the emerging market world that when a bank ran into problems it would either be bailed out by the government (or, more likely, the International Monetary Fund) or go spectacularly bust and close its doors.And indeed, when BTA, along with several other Kazakh banks, first started to collapse almost two years ago, that was what most western investors assumed would occur.
Hence, some of the powerful western creditors who held the debt of BTA and other banks started pushing for a furtive state rescue, of sorts – and warned that if this did not occur Kazakh-style financial Armageddon would occur. However, to its credit, the Kazakh government faced down some of the more aggressive western banks by insisting on something rarely seen anywhere in the world: an orderly restructuring, with creditor haircuts, of a still-functioning bank."
So who's backward now?
Good piece from Gillian Tett about how Kazakhstan has been able to impose haircuts on bond holders:
http://www.ft.com/cms/s/0/050d003a-6...44feabdc0.html
"Until recently it was generally assumed in the emerging market world that when a bank ran into problems it would either be bailed out by the government (or, more likely, the International Monetary Fund) or go spectacularly bust and close its doors.And indeed, when BTA, along with several other Kazakh banks, first started to collapse almost two years ago, that was what most western investors assumed would occur.
Hence, some of the powerful western creditors who held the debt of BTA and other banks started pushing for a furtive state rescue, of sorts – and warned that if this did not occur Kazakh-style financial Armageddon would occur. However, to its credit, the Kazakh government faced down some of the more aggressive western banks by insisting on something rarely seen anywhere in the world: an orderly restructuring, with creditor haircuts, of a still-functioning bank."
So who's backward now?