Chapter Four-The Economics and Politics of Global Debt
-In the nineteenth century, private banks helped countries cope with swings in the trade cycle and made emergency loans to keep governments afloat. A reason why bankers disliked the Bretton Woods Conference was that it created a competing public sector institution, the IMF, to provide short-term loans to countries experiencing trade and financial difficulties. The Third World owes the Western banking system over half a trillion dollars. Lost cause thinking we will be paid
back. Global debt crisis had two fundamental causes-importance of Third World countries in global banking revolution of 60?s and 70?s; series of economic shocks that hit the world economy in the 70?s.Richard Weinert lists four main factors that are responsible for the banks? expansionist thrust into the Third World in the 70?s: servicing client needs, defensive... [continues]
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