Inevitably, there will be strenuous efforts made by the Bush Administration, other Western governments and numerous private banks to stampede the former Soviet Union into a commitment to secure all debt obligations beyond the very limited rescheduling of principal payments already agreed for 1992.
Yet regulators and lawsuit-fearful auditors pressed banks and other financial firms to relentlessly knock down the book value of this subprime paper, even in cases where these obligations were being serviced in the payment of principal and interest.
There are two more twists to principal-protected notes that investors need to understand: First, they're unsecured obligations of the banks that issue them.