collateralised debt

Well yes. Collateralised by the worthless assets of the irish banks.

That is not the Irish public's problem. Any creditor who accepts crap collateral accepts the risk of a haircut. That's the whole point of the term "due diligence" when applied to collateral. The haircut can go all the way to 100 % if the collateral turns out to be worthless. That is not a problem. That is a perfectly normal bankruptcy, such as which happens every day somewhere in the OECD.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.