The government debt guarantee should make financing a cinch.
What happens if we pay down our debt and the world, at least those parts that use our debt to guarantee transactions, has to find something else as secure, liquid and has some fractional ability like our debt.
The debt-guarantee scheme is due to expire in October but may be extended.
It is widely perceived that they will be bailed out by the government should mortgage defaults force them to pay off bondholders whose debt they guarantee.
In addition to injecting money into banks, the government will guarantee new debt issued by banks for three years, and will offer an unlimited guarantee on non-interest-bearing deposits such as those used by businesses to make payroll.
What happens when the debt of a bankrupt S corp, owned by solvent taxpayers who didn't personally guarantee the debt, is written off by a bank?
"Other financial tools such as credit guarantee or debt refinancing funds are needed to assist companies to operate, " suggests Dr Doanh.
Then, they need to prove that they can tap into long-term credit markets without leaning on the Federal Deposit Insurance Corp. to guarantee their debt.
The other, cleaner, approach would be to privatise them, so that the markets are left in no doubt that their debt carries no government guarantee, implicit or explicit.
Holger Schmieding, chief economist of Berenberg Bank, thinks governments should guarantee the debt of any country that submits to an adjustment programme approved by the EU and IMF.
When the U.S. Treasury and Federal Reserve Board decided to guarantee bank debt and inject capital into our major banks, it started a chain reaction in several sectors of the bond market.
Any doubts that the financial markets believe that the government stands behind the federal mortgage agencies were dispelled recently when a senior official told Congress that the government did not guarantee their debt.
Under the program announced this morning, the FDIC will insure new bank debt in the Temporary Liquidity Guarantee Program.
They've long enjoyed an implicit guarantee on their debt from the government.
This stems from a Financial Accounting Standards Board ruling that airport bonds should be treated as debt of the airlines that guarantee them.
If the private sector suffers, the public sector may be forced to step in and assume, or guarantee, the debt, as happened in 2008.
Half would be reinvested in 30-year Greek government debt, with the remaining 20% put into triple A securities as a form of guarantee against losses on the Greek debt.
The commitment, the guarantee that it provides, needs to be retained and that our approach is to find the savings that we can within the program, as we have demonstrated in the past and going forward as we deal with long-term deficits and debt reduction, while maintaining that guarantee.
Even Germany - with its debt-laden local government - cannot guarantee the debts of the rest of Europe.
Plus, few majors can guarantee a financial return that will offset the financial debt many students will accumulate during college.
Given the groundhog day aspect to how the sovereign debt crisis has played out, there is of course no guarantee resolution will happen, or happen soon.
When the 2008-09 global economic crisis disclosed the weakness of many Irish bank loans--what Warren Buffett calls swimming naked when the tide goes out--the Irish government decided to guarantee all bank depositors and pay withdrawals from new debt.
The French president wants a banking union with a joint guarantee of deposits and a joint fund to pay down debt.
Critics say the implicit guarantee of government backing that many investors believe comes attached to corporate debt enables inefficient companies to thrive by borrowing money at cheap rates.
When a person enters into a personal guarantee they have basically pledged the totality of their wealth to back a debt.
And many families also keep a sizable amount of money in their savings account or continue to put money into their 401(k)s, while still carrying thousands of dollars in credit-card debt--even though dipping into savings and paying off their credit-card bills would guarantee them an immediate return on investment of 15% or 18%.
The idea to increase guarantee fees emerged during summer negotiations to pare the national deficit and increase the U.S. debt ceiling.
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