After seeing the debacle 1999-2002 in CDOs, most insurers swore off CDOs - aside from AIG ( AIG ). You can't make them pay; the only big penalty is getting shut out of the bond market - which means that in the future, their budget would have to be balanced on a cash basis. Now one could just print their way out of the situation, and hand fresh currency to creditors - but at a cost of high interest rates and inflation, which could crush economic activity in real terms.