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> If they don't want to deal with the possibility of bankruptcy, they shouldn't lend out money. This only works if lenders are private groups and if they have
by wyager 10y ago
> If they don't want to deal with the possibility of bankruptcy, they shouldn't lend out money.
This only works if lenders are private groups and if they have the ability to set the terms of the loan (or deny it altogether). Neither of these generally apply at the government level.
- vkou 10y agoNobody forces lenders to buy up PR bonds, or accept the terms at which they are issued.
- dragandj 10y agoEU institutions force them by controlling the policy. Sure, if you have a few millions to invest, you can go elsewhere, but if you have billions, you are most usually working with other people's or institutional money, and are fairly limited by various laws and policies, and large part of that money practically has to go in some sort of government bonds. Then, you can not just disregard those AAA ratings at return * 2 because you'll have trouble explaining that you do not trust the ratings...
- azernik 10y agoWhich is why people are so angry at the ratings agencies - they are private institutions that were supposed to be giving honest information, and they have misleading AAA ratings to investments that did not merit them.
- deleted 10y ago[deleted]