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Creditors in sentence

1217 examples of Creditors in a sentence

Like other aid recipients, Greece has become locked in a codependent relationship with its creditors, which are providing assistance in the form of de facto debt relief through subsidized loans and deferred interest payments.
The country’s creditors, for their part, have an incentive to protect the euro and limit the geopolitical risk of a Greek exit from the eurozone.
As a result, even when Greece fails to comply with its creditors’ demands – for, say, tax hikes or pension reforms – it continues to receive assistance with few penalties.
As long as Greece’s finances are propped up by international creditors, the country’s policymakers will be able to abdicate their responsibility to manage the provision of public goods like education, health care, national security, and infrastructure.
And yet, as long as the country remains locked in a cycle of codependence with its creditors, the state of perpetual crisis is likely to persist.
Rather than imposing the costs of the ECB’s and EFSF’s losses on European taxpayers, the banks’ creditors could give up some of their claims in exchange for receiving shares from the banks’ owners.
Ideally, bank creditors would not lose money, because their fixed-interest claims would be converted into bank shares of similar value.
A true loss would be inflicted on a bank’s creditors only if the write-off losses on toxic mortgage loans exceeded the bank’s equity.
But, even then, it would be better for creditors to bear the loss than for taxpayers to do so, because this would encourage more cautious lending in the future.
While the enormous volume of the bank debt implies that governments should shy away from socializing banking risks, it also suggests that only the banks’ creditors could reasonably be asked to foot the bill without being overburdened.
Thus, a debt-equity swap of less than 7.5% of the creditors’ investment would be enough to compensate for the banks’ losses.
And, even if the banks’ private depositors, whose claims are 39% of the aggregate balance sheet, were excluded, the debt-equity swap necessary to compensate for a loss of up to 100% of the equity would be less than 12% of the creditors’ investment volume.
Apart from avoiding the excess burden and injustice of taxation, they also have the benefit of inducing banks’ owners to choose a prudent investment strategy, while persuading creditors to scrutinize and select carefully the banks to which they want to lend.
After all, such debts are contracts – that is, voluntary agreements – so creditors are just as responsible for them as debtors.
In fact, creditors arguably are more responsible: typically, they are sophisticated financial institutions, whereas borrowers frequently are far less attuned to market vicissitudes and the risks associated with different contractual arrangements.
What did help was to provide better incentives for good lending, by making creditors more responsible for the consequences of their decisions.
Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors?
If Greece does well, its creditors will receive more of their money; if it does not, they will get less.
That, in turn, will force a default against Greek citizens, as well as foreign creditors, because the government will be unable to honor the euro value of insured deposits in Greek banks.
A debtor’s strongest negotiating asset is always that creditors cannot contemplate default, because default would bring down the entire financial system.
Last April, Argentina pulled off the largest bond issue in Latin America’s history, after a settlement with “holdout” creditors from an earlier debt rescheduling ended its pariah status in markets.
Thus, it seeks to protect the lawful rights of both creditors and debtors.
Yet this process leaves the rights of creditors undefended, eliciting widespread criticism.
For example, if the required majority of shareholders adopts such a plan, the court should protect the rights of the minority of creditors who may have opposed it.
And if the liquidation rate for creditors’ common claims is defined as no lower than that at the time the draft restructuring plan was submitted for approval, compensation must be considered in the event that payment is delayed.
Thus, paradoxically nationalization may be a more market-friendly solution: it wipes out common and preferred shareholders of clearly insolvent institutions, and possibly unsecured creditors if the insolvency is too large, while providing a fair upside to the tax-payer.
After all, low interest rates benefit debtors and hurt creditors, as does the inflation that can be spurred by monetary easing.
The Eurozone’s Narrowing WindowPRINCETON – Portuguese authorities recently made a preemptive offer to their country’s creditors: Instead of redeeming bonds maturing in September 2013, the government would stretch its repayment commitment out to October 2015.
Combining their role as creditors and corporate monitors, banks developed stable relationships with industrial firms which substantially added to long-term corporate stability.
Given this shifting business mix, German universal banks will increasingly find themselves focusing on their roles as creditors and corporate advisors, with their role as shareholders receding somewhat into the background.
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