Around sixty sub prime lenders have already gone bankrupt.

It is the victims of predatory lenders who need government help.

Subsistence farming of traditional food grains, fruits, and vegetables is giving way to cash crops and monocultures dependent on high priced inputs that small farmers cannot afford and water that they can t provide.

This protects both borrowers and lenders.

Farmers borrow money from usurious private lenders.

Creditors have better memories than debtors.

Second, if the holdouts are paid in full, the majority of creditors who accepted a haircut can request to be paid in full, too.

Greece, too, is a victim of its creditors misconceptions and taboos.

Greece has met its creditors demands far more than halfway.

The government is also frequently borrowing millions of euros from domestic lenders.

Price inflation forces creditors to accept repayment in debased currency.

Viewed from creditors perspective, the age of cheap finance for the indebted countries is over.

Reckless lending to the Greek state was based on European creditors terrible decision making.

The attempt to impose a benevolent creditors dictatorship is now being met by a debtors revolt.

After all, private creditors hold only a minimal share of Greek debt nowadays.

The shift favors hardline creditors in bond issuances governed by US law.

However, monetary policy is a much more awkward, indirect and imprecise way of choosing winners and losers than fiscal policy.

A default would also appropriately place part of the costs of Greece s borrowing spree on creditors.

But creditors don t have an incentive to place tough limits on banks.

The United States and Germany are at opposite extremes of the creditor debtor scale.

Our creditors insistence on greater austerity is subtle yet steadfast.

70 of France s public debt creditors banks, pension funds, insurance companies, and sovereign funds are non resident. Many of these foreign creditors, however, reside within the eurozone.

That way, formal haircuts on the face value of debt can be avoided via new bonds that include only a maturity extension and an interest rate cap that is set below today s unsustainable market rates.

For foreign creditors, such crushing rates didn t matter (or so they thought).

The alternative is for government to write down public debt and bank deposits, giving creditors and depositors hair cuts.

Such exchange offers can limit private creditors losses if they are done early.

A Eurobond is a special kind of foreign debt that a government issues to investors, meaning creditors.

This would move Greece and its official creditors beyond the continuous angst that now prevails.

But it is bad for those with a strong asset position by reducing their spending power, it spurs them to save even more.

Risk premiums widened, and the eurozone was divided into creditor and debtor countries.

The low interest rate environment has also caused lenders to take extra risks in order to sustain profits.

The risk of default or debt restructuring induces creditors to be more careful in their lending decisions.

The financial system is a complex interaction of lenders and borrowers, buyers and sellers, and savers and investors.

At the end of the day, as long as the IMF is in the lending business, it needs to keep its creditors happy.

Only governments that are chronically unable to finance their outlays with domestic taxes or domestic debt must keep borrowing large sums abroad. A deep craving for the favor of foreign lenders usually derives from some deeply engrained form of misgoverance.

For sovereign bonds held by other sovereigns, the Paris Club of creditor countries has developed procedures for handling the debt.

Foreign lenders resulting caution would prevent future Egyptian governments from irresponsibly saddling their populace with debt.

That will save the euro, but it is also a step toward the permanent division of Europe into debtors and creditors.

Private borrowers often have to offer collateral, such as their houses. The collateral limits the lenders downside risk, and the fear of losing the pledged assets encourages borrowers to act prudently.

The key lesson for European policymakers is thus that it is possible to bail in a bank s creditors.

Waiting to restructure unsustainable debts would only lead to disorderly workouts and severe haircuts for some private creditors.

Greece is refusing to acquiesce to demands by its creditors that it cut payments to the elderly and raise the value added tax on their medicine and electricity.

What did help was to provide better incentives for good lending, by making creditors more responsible for the consequences of their decisions.

If the government were simply fulfilling its campaign promises, it would already have rejected the proposal.

For the other creditors, the toughest choice is to admit as the IMF knows that their Greek debts must be restructured.