The untold story of the Mexican debt crisis: Domestic banks and external debt, 1977-1989
In the years preceding the international debt crisis of the 1980s, international banks displayed a growing enthusiasm for lending to Mexico and other developing countries. During this period, Mexico's development and commercial banks got heavily involved in intermediating foreign finance with domestic final users. Although important, scholars have thus far neglected the role played by Mexican banks in international capital markets and in the country's external indebtedness process. This paper argues that the imbalances which Mexican banks incurred in running their international operations eventually brought them to the brink of bankruptcy once the crisis began. Given that the banks that were at risk represented a large share of the domestic market, this paper argues the whole Mexican banking system was threatened with collapse. The improved understanding of the banking system's exposure to and dependence on foreign finance provides new insights into Mexico's debt renegotiation outcomes and the nationalization of the banking system in the aftermath of the crisis.
|Date of creation:||2014|
|Contact details of provider:|| Postal: Geleitsstrasse 14, 60599 Frankfurt am Main, Germany|
Web page: http://www.eabh.info/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jeffrey Sachs & Harry Huizinga, 1987.
"U.S. Commercial Banks and the Developing-Country Debt Crisis,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 18(2), pages 555-606.
- Sachs, J. & Huizinga, H.P., 1987. "U.S. commercial banks and the developing-country debt crisis," Other publications TiSEM ada14007-7229-4f6d-a016-f, Tilburg University, School of Economics and Management.
- Jeffrey Sachs & Harry Huizinga, 1987. "U.S. Commercial Banks and the Developing Country Debt Crisis," NBER Working Papers 2455, National Bureau of Economic Research, Inc.
- Lipson, Charles, 1981. "The international organization of Third World debt," International Organization, Cambridge University Press, vol. 35(04), pages 603-631, September.
- Fabian Valencia & Luc Laeven, 2008. "Systemic Banking Crises; A New Database," IMF Working Papers 08/224, International Monetary Fund.
- Diaz-Alejandro, Carlos, 1985. "Good-bye financial repression, hello financial crash," Journal of Development Economics, Elsevier, vol. 19(1-2), pages 1-24.
- Bertola, Luis & Ocampo, Jose Antonio, 2012. "The Economic Development of Latin America since Independence," OUP Catalogue, Oxford University Press, number 9780199662142, April.
- Jeffrey Sachs, 1986. "Managing the LDC Debt Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 397-440.
- 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. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:zbw:eabhps:1403. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.