As governments step in to help, bureaucrats in Europe are imposing rules that can make even the safest debt harder to sell
As a lawyer who prepares prospectuses for bond offerings from major banks, Anna Pinedo never thought she'd have to assemble hundreds of pages of facts on the creditworthiness of Federal Deposit Insurance Corp. and the U.S. government. But a frustrated Pinedo is doing just that, in a telling example of the new sand that's grinding the gears of the global financial system.
This grit was thrown in by regulators in London who won't authorize Pinedo's bank clients to sell newly guaranteed debt to European investors without detailed disclosures about the FDIC, which is promising to make sure the bonds are repaid. So Pinedo and her firm, Morrison & Foerster, are rounding up all manner of facts about the FDIC's solvency, about dates U.S. government debt matures, about trends in the U.S. trade balance, and so on. It doesn't seem to matter that U.S. currency and creditworthiness are still among the strongest in the world.
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