THE Government has argued all along that the fallout from a hit to the bondholders who lent money to Anglo would spread like wildfire throughout Ireland's financial system.
The point is very much proved by an analysis of Anglo's 'known' senior bondholders, those institutions whose positions have been publicly declared and recorded by Bloomberg.
Of the 19 investors listed as holding the debt that some would like to default on, all bar three also hold Irish government debt. In most cases, this is far bigger than the Anglo holding.
The 19 Anglo investors also include nine who are listed as holding AIB debt, and six who hold debt from Bank of Ireland.
"That would be fairly typical across the bondholder universe," said one market source. "You wouldn't often have someone with Anglo debt and no other Irish debt."
The risk is that if you alienate the holders of Anglo debt, you also alienate the holders of AIB, Bank of Ireland and government debt.