>It's entirely possible to communicate with all bondholders, wherever they
>may be, by using the services of the two big securities depositories (Cedel
>and Euroclear), who hold settlement for pretty much the entire Brady
>market. Ecuador could make offers to the bondholders and get their
>responses quite easily.
Logistics are only part of the problem. In bondworld, you've got many holders who could easily sell or make separate deals. They don't know each other. In bankworld, you've got 20 major creditors who all know each other, would find it hard to sell, and can't make separate deals. It may be good for the debtors that their creditors speak with many voices; as Citibank's chief negotiator with New York City during its mid-1970s fiscal crisis said "we do have a certain noblesse oblige [sic] or tight and firm discipline. So that we could marshal our forces, and when we spoke to the city or the unions we could speak as one voice...." I guess state institutions like the IMF have to step up their role as the collective creditor.
Doug