Financial Instability and the International Debt Problem (Southampton Series in International Economics) - Hardcover

McKenzie, George; Thomas, Stephen

Hardcover

ISBN 10: 0333464192 ISBN 13: 9780333464199

Publisher: Palgrave Macmillan, 1991

Synopsis

The authors argue clearly and convincingly in this book that the debt crisis which has plagued the world economy for the past ten years is due to the inherent fragility of financial markets. Governments, financial institutions and borrowers, including developing countries, have simply expected too much from these markets. In a world of volatile interest rates, exchange rates and uncertain government policy, it is virtually impossible for financial institutions to effectively distinguish fundamental shifts in economic activity from random shocks.

About this title

Synopsis

The conclusion reached in this book is that the debt crisis which has plagued the world economy for the past ten years is due to the inherent fragility of financial markets. Governments, financial institutions and borrowers, including developing countries, have simply expected too much from these markets. In a world of volatile interest rates, exchange rates and uncertain government policy, it is virtually impossible for financial institutions to effectively distinguish fundamental shifts in economic activity from random shocks. Therefore mistakes, when identified, are corrected only with a long lag. In addition to a detailed analysis of this thesis, the book contains an evaluation of recent proposals to harmonize international bank regulations and an extensive discussion of how financial markets are absorbing the huge losses which have emanated from the inability of borrowers to meet their debt service payments.

Edition details

• Publisher: Palgrave Macmillan
• Publication date: 1991
• Language: English
• ISBN 10: 0333464192
• ISBN 13: 9780333464199
• Binding: Hardcover
• Number of pages: 220