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Abstract
In the early years after the onset of the debt crisis in 1982, developing countries with debt problems tended to have access to capital market financing primarily in the form of reschedulings of principal obligations falling due and, in some cases, arrangement of new loans—usually on a concerted basis where new money was provided by banks as part of a collective effort including support from official sources. This approach was viewed as the appropriate response to what was regarded primarily as a “liquidity” problem faced by debtors, and was consistent with the weak underlying financial position of the major commercial banks that precluded wholesale writedowns of exposure to problem debtors.
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