Deleveraging with Convertible Bonds

For Wolfram F. Richter, University of Dortmund, the various crises are essentially credit crises. It is therefore risky to see strategies based on refinancing old debts by taking on new ones as solutions to the crisis. Instead of refinancing debt or leveraging, debts in the public and private sectors need to be downsized while avoiding a credit crunch in the real economy. In the opinion of Wolfram Richter, the Eurozone states should consider the coordinated issue of convertible bonds to achieve this goal.