Crisis Erupts

Nicholas P. Sargen ()
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Nicholas P. Sargen: Nicholas Sargen Advisory LLC

Chapter 5 in JPMorgan’s Fall and Revival, 2020, pp 41-47 from Springer

Abstract: Abstract The Less Developed Country (LDC) debt crisis surfaced in August 1982, when the largest Latin American borrowers—Mexico, Brazil and Argentina—depleted their foreign exchange reserves and could not service their interest payments. It came as a complete shock to the management of Morgan Guaranty, whose loans outstanding to these countries matched its capital. Preston first had to decide whether to listen to Rimmer de Vries who believed the debt crisis threatened the bank or the Latin American lending officers who believed it was a temporary liquidity problem. He subsequently sided with those who argued the problem would require a coordinated workout on the part of debtor countries, multinational banks and creditor governments.

Date: 2020
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DOI: 10.1007/978-3-030-47058-6_5

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