Macquarie Group and Insurance Australia Group are running a nice little lurk at the moment. They are taking advantage of the global financial crisis which has seen the prices of some debt fall because of fears those companies are in trouble and might default.

The prices of their debt has plunged to less than 50 cents in the dollar in some cases, or less.

That has encouraged the two companies to buy back previously issued debt at a discount, thereby booking profits on the way through. It’s part of a wider trend in Europe for banks to buy back discounted low ranking debt, although this is being done at the suggestion of bank regulators who want banks to improve the quality of their capital.