There could be a number of explanations for this rejection.
- They could have rejected the idea because they knew that the countries that would be required to fund the bailout would not do so. This is a tad simplistic because what countries like Germany have ruled out is an endless stream of bailouts that do not solve the underlying problem.
- They could have rejected the proposal because they could see that it transfers vast quantities of wealth to individual bankers and elite traders while saddling the sovereign with a tremendous debt load and failing to restore confidence in the banking system.
- They could have rejected the idea because they resented being advised to adopt a solution where the speaker would not put his country's money where his mouth is. After all, when pushed on the question of would the US help to fund the bailouts, Mr. Geithner said absolutely not.
Fear driven assumptions must be addressed because in any leveraged financial system there is not enough equity to support the system in the face of these assumptions.
It is only by returning the conversation to the facts, that assumptions are constrained by the facts and not emotions like fear.