What methods do banks use to reduce their exposure

Reference no: EM131900085

Problem

1. What caused the international debt problem of the developing nations in the 1980s? Why did this debt problem threaten the stability of the international banking system?

2. What is a eurocurrency? How did the eurocurrency market develop?

3. What risks do bankers assume when making loans to foreign borrowers?

4. Distinguish between debt-to-export ratio and debt service/export ratio.

5. What options are available to a nation experiencing debt-servicing difficulties? What limitations apply to each option?

6. What methods do banks use to reduce their exposure to developing-nation debt?

7. How can debt/equity swaps help banks reduce losses on developing-nation loans?

Reference no: EM131900085

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