During this period, it would need to be determined whether the country was only temporarily illiquid or actually insolvent. Should the latter be the case, private creditors could then be bailed into the necessary restructuring. This would minimise the risks to taxpayers since the required volume of assistance loans would be lower from the outset.
Creditor liability, of course, presupposes the creditors' ability to bear the resultant losses. Ensuring this is, not least, a task for financial market regulation, which brings me to my third and final topic. 4.