By allowing EU institutions to convert their existing holdings of Greek bonds for senior debt instruments, not subject to haircut, the Europeans have mightily pissed off American and other bondholders. The amount of venom directed at the ECB in the blogs and on the boards for this kind of trickery — which, let's face it, would have startled us with its barefaced cheek if it had happened in China — is quite frightening. The more perceptive commentators are talking of a "political premium" that will have to be paid by any and all Euro Zone governments for access to the international bond markets. I wonder if the big winners here might not end up being London-based law firms, as I guess there is going to be a big increase in the work of drawing up "English Law" bonds (and a corresponding decline in Portuguese-, Irish- and Italian-law bonds), and there will no doubt be an increase in London-based litigation on the basis of those bonds further down the road.
No comments:
Post a Comment