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The BIS and the Latin American debt crisis of the 1980s

Author

Listed:
  • Piet Clement

    () (Bank for International Settlements)

  • Ivo Maes

    () (National Bank of Belgium, Research Department
    Université catholique de Louvain, Robert Triffin Chair
    ICHEC Brussels Management School)

Abstract

The Latin American debt crisis, which broke out in August 1982, was the first global financial crisis in the postwar period. While the crisis started in the "periphery", it constituted a threat to the "core" of the world economy, as the banking system was under severe pressure. Alongside the IMF, the BIS played an important role in coordinating the international response to the crisis. Moreover, a lot of work at the BIS in the second half of the 1970s had aimed at restraining the debt build-up. Discussions on the rising debt levels were highly influential in shaping the BIS view of financial stability, with the "macroprudential" concept at its core. However, in the analysis of the debt buildup, the role of financial innovations was not really captured. In this paper, we focus on the Latin American debt crisis, discussing first the debt build-up, different initiatives to restrain lending and the BIS role in the management of the crisis. We then turn to the ensuing efforts to strengthen the financial system and the emerging BIS approach to financial stability.

Suggested Citation

  • Piet Clement & Ivo Maes, 2013. "The BIS and the Latin American debt crisis of the 1980s," Working Paper Research 247, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201312-247
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp247en.pdf
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    References listed on IDEAS

    as
    1. Claudio Borio, 2011. "Implementing the Macroprudential Approach to Financial Regulation and Supervision," Chapters,in: The Financial Crisis and the Regulation of Finance, chapter 7 Edward Elgar Publishing.
    2. Bank for International Settlements, 1986. "Recent innovations in international banking (Cross Report)," CGFS Papers, Bank for International Settlements, number 01.
    3. Battilossi, Stefano & Cassis, Youssef (ed.), 2002. "European Banks and the American Challenge: Competition and Cooperation in International Banking Under Bretton Woods," OUP Catalogue, Oxford University Press, number 9780199250271.
    4. Claudio Borio, 2011. "Rediscovering the Macroeconomic Roots of Financial Stability Policy: Journey, Challenges, and a Way Forward," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 87-117, December.
    5. Lamfalussy, Alexandre, 1985. "The Changing Environment of Central Bank Policy," American Economic Review, American Economic Association, vol. 75(2), pages 409-413, May.
    6. Eichengreen, Barry & Jung, Naeun & Moch, Stephen & Mody, Ashoka, 2014. "The Eurozone Crisis: Phoenix Miracle or Lost Decade?," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 288-308.
    7. Carlos F. Diaz-Alejandro, 1984. "Latin American Debt: I Don't Think We Are in Kansas Anymore," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(2), pages 335-403.
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    More about this item

    Keywords

    Latin American debt crisis; BIS; macroprudential; financial fragility; Lamfalussy;

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B32 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Obituaries
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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