'I hope the private sector will come in,' he said, but noted that there is currently a reluctance to buy mortgage securities because of the uncertainty around rights as a first-lien holder.
Some 10-20% of the exchange's turnover has to be auctioned as "second-lien", meaning that a bank stands ahead of the investor, in the event that the buyer of the goods goes bust.
Some of Meridian's biggest creditors were hedge funds which held a lot of first- and second-lien debt and in effect had a blocking vote in both classes.