There is never a perfect time to announce you are virtually bankrupt. For Puerto Rico, however, this week was a better moment than most. On Sunday, the island’s government released a long-planned economic report written by Anne Krueger, a former World Bank chief economist, which declared that the territory was in fiscal crisis. As governor Alejandro García Padilla put it, the island’s $72bn debts are now “not payable”.

But instead of sowing widespread fear, debt prices only wobbled. For with Greece in full-blown financial crisis, and the Chinese markets tumbling, Puerto Rico’s revelation seems almost a sideshow. Nevertheless, it would be a mistake to ignore what is happening in Puerto Rico. For Professor Krueger’s report highlights two important points. First, Greece is not the only place grappling with excess debt, poor governance and opaque finances. Second, America, like Europe, badly needs to become more imaginative — and practical — in dealing with excess public sector debt.

For the problem bedevilling Puerto Rico is not simply its $72bn debt pile, but the fact that it lacks any obvious mechanism to restructure it. The island could be in for a choppy time in the municipal debt markets. Other debt-laden entities, such as the state of Illinois, might soon be caught in the storm.