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How has the debt crisis affected commercial banks?

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  • Huizinga, Harry

Abstract

Top commercial banks seemed to have weathered the debt crisis, however it remains to be seen whether their current strength and stability will help reestablish normal credit relationships between private banks and the developing countries. Some losses by private creditors are likely to be part of any resolution of the debt crisis, and such losses are implicit in some of the many proposals for dealing with the crisis. However, through a combination of self interest and public policy the current impasse in the debt crisis should be overcome. This may be done partly through large scale debt swaps sponsored by private or public agencies. Debt swaps are already being implemented bilaterally in small steps and through a variety of instruments, including debt conversions and buybacks.

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  • Huizinga, Harry, 1989. "How has the debt crisis affected commercial banks?," Policy Research Working Paper Series 195, The World Bank.
    • Handle: RePEc:wbk:wbrwps:195
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    References listed on IDEAS

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    1. 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.
    2. Edward J. Kane & Haluk Unal, 1987. "Off-balance-sheet items and the changing market and interest-rate sensitivity of deposit-institution equity returns," Proceedings 171, Federal Reserve Bank of Chicago.
    3. Steven C. Kyle & Jeffrey Sachs, 1984. "Developing Country Debt and the Market Value of Large Commercial Banks," NBER Working Papers 1470, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Mamoru Kaneko & Jacek Prokop, 1993. "A game theoretical approach to the international debt overhang," Journal of Economics, Springer, vol. 58(1), pages 1-24, February.
    2. Barry Eichengreen & Ashoka Mody, 1998. "What Explains Changing Spreads on Emerging-Market Debt: Fundamentals or Market Sentiment?," NBER Working Papers 6408, National Bureau of Economic Research, Inc.
    3. Diwan, Ishac & Demirguc-Kunt, Asli, 1990. "The menu approach to developing country external debt : an analysis of commercial banks'choice behavior," Policy Research Working Paper Series 530, The World Bank.
    4. Gooptu, Sudarshan & Martinez Peria, Maria Soledad, 1992. "Factors that affect short-term commercial bank lending to developing countries," Policy Research Working Paper Series 886, The World Bank.
    5. Ms. Edda Zoli, 2004. "Credit Rationing in Emerging Economies' Access to Global Capital Markets," IMF Working Papers 2004/070, International Monetary Fund.
    6. Barry Eichengreen & Ashoka Mody, 2000. "What Explains Changing Spreads on Emerging Market Debt?," NBER Chapters, in: Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies, pages 107-134, National Bureau of Economic Research, Inc.
    7. Prywes, Menahem, 1990. "Risk facing U.S. commercial banks," Policy Research Working Paper Series 534, The World Bank.
    8. Clark, Ephraim & Kassimatis, Konstantinos, 2004. "Country financial risk and stock market performance: the case of Latin America," Journal of Economics and Business, Elsevier, vol. 56(1), pages 21-41.

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