Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The foreign exposure also "includes derivatives and other credit commitments", the seniority of which is not entirely clear to me.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Carrie (migeru at eurotrib dot com) on Fri Feb 4th, 2011 at 09:31:42 AM EST
[ Parent ]
There shouldn't be any.  That's a private contract - I think but IANAL - between the bond holder and two or more parties.  The State should only perhaps, depending, guarantee the underlying bond.

The Neo-libs are always shouting the State should not interfere with private contracts so ... the State should not interfere and let the derivatives go south.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Feb 4th, 2011 at 01:30:27 PM EST
[ Parent ]
The Irish state might have to deal with the negative consequences of derivatives to Irish institutions. But in general, yes, let those who made the bed lie in it.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 4th, 2011 at 11:18:50 PM EST
[ Parent ]


Occasional Series