Developing Country Lending and Current Banking Conditions

Abstract

This article describes the general evolution of the present developing country debt problem and discusses some of the current efforts to deal with it.' In a nutshell, the problem since 1982 has been that many debtor nations in the developing world have interrupted their normal external debt service from time to time and, in most instances, have had to rely on reschedulings and loans of additional funds from both commercial banks and official sources to maintain debt service. Because of both the larger quantities of funds involved and the commitment of new commercial bank loans to assist the adjustment process, the current methods of debt resolution stand apart from prior balance of payments adjustment programs in the post-World War I1 era. During the 1970s and early 1980s, the claims of United States banks on developing countries (also called "lesser developed countries," or "LDCs"), increased rapidly. The LDC debts raised difficult issues that have troubled borrowers, lenders, creditor country governments, and official multilateral lending agencies since the scope of the debt problem became clear in 1982.

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Cite this paper

@inproceedings{Davis1988DevelopingCL, title={Developing Country Lending and Current Banking Conditions}, author={John M. Davis and Owen F. Humpage and Mark S . Sniderman}, year={1988} }