Sources tell me counterparties were more worried at this point about MF Global defaulting on margin calls than European countries defaulting on the bonds.
FORBES: Uncontrolled Risk Taking, Not Bad Accounting, Did MF Global In
2.
Most nonbanks, such as insurance companies and hedge funds, have perfectly adequate bankruptcy processes already (the recent MF Global bankruptcy is a case in point).
FORBES: The Cyprus 'Bail-In' Exposes 'Too Big To Fail' As All Too Timid
3.
The defenders of the Volcker rule point out that trading in foreign sovereign bonds played a central role in bringing down MF Global Holdings Ltd.