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BANK LENDING TO LDCs: LESSONS FROM THE 1970s

Author

Listed:
  • Angelos Antzoulatos
  • Naveen Seth

Abstract

We use a recently-compiled database with monthly observations, to analyse the determinants of syndicated loans to Latin American (L.A.) and East Asian countries, for the period 1972-1982. Our results indicate that the loans were to a large extent supply-driven, and thus provide econometric evidence that “overlending” was a significant determinant of them along with economic fundamentals in the borrowing countries. They also suggest that E. Asia's recent currency and banking crises will not likely develop into another “debt crisis”, precipitated by a prolonged withdrawal of private capital from the region. [F34, G15, N25, N26]

Suggested Citation

  • Angelos Antzoulatos & Naveen Seth, 2001. "BANK LENDING TO LDCs: LESSONS FROM THE 1970s," International Economic Journal, Taylor & Francis Journals, vol. 17(2), pages 19-36.
    • Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:19-36
    DOI: 10.1080/10168730300080010
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    References listed on IDEAS

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    1. Morande, Felipe G., 1988. "Domestic currency appreciation and foreign capital inflows: What comes first? (Chile, 1977-1982)," Journal of International Money and Finance, Elsevier, vol. 7(4), pages 447-466.
    2. Aliber, Robert Z, 1984. "International Banking: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 661-678, November.
    3. Bohn, Henning & Tesar, Linda L, 1996. "U.S. Equity Investment in Foreign Markets: Portfolio Rebalancing or Return Chasing?," American Economic Review, American Economic Association, vol. 86(2), pages 77-81, May.
    4. Chuhan, Punam & Claessens,Constantijn A. & Mamingi,, 1993. "Equity and bond flows to Asia and Latin America : the role of global and country factors," Policy Research Working Paper Series 1160, The World Bank.
    5. Edwards, Sebastian, 1984. "LDC Foreign Borrowing and Default Risk: An Empirical Investigation, 1976-80," American Economic Review, American Economic Association, vol. 74(4), pages 726-734, September.
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