The FT reports that the European High Yield Association (EHYA) has:
written to the government arguing that the UK Insolvency Act (1986) is not up to the task of handling the complex restructurings that are expected to characterise the next downturn.
The EHYA says on its web site that: it's:
a trade association representing participants in the European high yield market ... including banks, investors, issuers, law firms, accounting firms, financial sponsors and other participants in the European high yield market.
Let's now read this another way. What they think is that those who deal in junk bonds and the debt of hedge funds think that life will get tough for them when the economy slips, as it inevitably well. Their definition of fairness (for that's what they've called for) is one where they don't lose out too badly as a result.
Funny how it's always the State who has to bail these people out. Odd that they don't like it on any other occasion, isn't it?
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“Funny how it’s always the State who has to bail these people out. Odd that they don’t like it on any other occasion, isn’t it?”
Erm… where does the article mention bail-outs?
In what way is a reassessment of rules optimised for a different era a bad thing?
Asking for the law to be changed to cover the risk you’ve taken and believe you cannot manage is a bail out in my book.
The fact that it’s a request in anticipation does not change the reality that they’re asking the state to assume at least part of their risk.
Which was what I said
“does not change the reality that they’re asking the state to assume at least part of their risk.”
I agree that asking for rules to be changed after the fact is questionable. However, I suspect that those involved are only belatedly beginning to realise how unsuited the current insolvency rules are to the complex financial relationships that now exist between companies (relationships that can be argued benefit us all through lowered cost of capital, more dispersed risk in the system, etc, etc).
To your main accusation, however, I still don’t see where changing the rules has any impact on the taxpayer (except, of course, for the one-time cost of assessing and implementing the changes!) Perhaps I’ve misread?