An analysis of the LDC bank loan market in light of two major defaults



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Texas Tech University


In this study, the focus will be on the consequential effects of such crises from the point of view of commercial banks that are involved in the lending process. An analysis will be carried out to learn the effects of the debt crisis on the Third World bank loan market. Specific questions will be asked as to the types of structural changes that take place when lending transforms into a crisis situation, and the impact of such crises on the market valuation of commercial banks. The main purpose of the research will be to identify the changes, if any, in the behavioral patterns of the commercial banks in the foreign debt market, after this market was struck in the early 1980s by a wave of worldwide defaults and moratoria by the Third World borrowers.



International, Banks and banking, Foreign, Loans, Country risk, Bank loans, Developing countries