The collapses often happened during periods of weak global activity associated with levels of unemployment at home and abroad that make it hard for displaced workers to get a job. The plight of the misfortunate former Irish Shipping workers has rightly been highlighted.
There are inherent conflicts of interest between different stakeholders in a restructuring though, and not all work-outs do contribute to overall economic efficiency. Indeed, sometimes key protagonists may be aiming to build a monopoly or attempting aggressive risk-shifting. That’s why public policy, for example, competition policy, or mergers and monopolies policy, may need to be activated.