Editing Holdout problem (section)

===Relationship between sovereign debt and private sector===

In the majority of countries, a substantial part of [[Government bond|sovereign bonds]] is likely to be held by [[financial institution]]s in the sovereign's own country (like banks, insurance companies and pension funds). Restructuring those instruments will therefore undermine the health of the domestic financial system. Even if countries are able to reduce significantly their costs of debt service, the same amount might need to be spent in bank recapitalizations.