Rollover risk is the threat of a country not being able to refinance or rollover its debt, forcing it either to turn to the European Central Bank in the case of eurozone countries or to seek emergency bail-outs, which happened to Greece, Ireland and Portugal. The OECD says the gross borrowing needs of OECD governments is expected to reach $10.4 trillion in 2011 and will increase to $10.5 trillion next year – a $1 trillion increase on 2007 and almost twice as much as in 2005. This highlights the risks for even the most advanced economies that in many cases, such as Italy and Spain, are close to being shut out of the private markets.
In the Kingdoms of Judea and Israel, once every 49 years all debts were erased and slaves went free. Everybody obeyed because it was written in the Bible.
6 comments:
Bankruptcy is a necessary feature of any debt system. However, I never understood the biblical system - if the Jubilee was approaching in a year or two, who in their right mind would lend money?
K
In the Kingdoms of Judea and Israel, once every 49 years all debts were erased and slaves went free. Everybody obeyed because it was written in the Bible.
Our modern banking systems are more sophisticated than the ancient Israeli banks.
Bankrupcy is a necessary part of any financial system. I see it in Israel's streets - American made cars have re-appeared after a long period they were absent. Bankrupcy and reorganization is necessary in capitalism. Why dont let Greece go down and start again?
K,
You think the Sages were dumber than you when it came to human motivations? They had legislation in place to mitigate both an unwillingness to lend before the Jubilee and borrowing in bad faith. Consult your local rabbi.
Once a while it is necessary to start all over again. To renew onself. להתחדש
Once a while it is necessary to start all over again. To renew onself. להתחדש
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