Latin Loans Still Slack
Bank lending to Latin America has never recovered from the debt crises of the 1980s, when negotiators repackaged defaulted sovereign loans as Brady bonds and gave rise to the bond market bonanza of the 1990s. Bond issuance tumbled after the onset of the emerging market crises in 1997, but bank lending has not taken up the slack. In fact, bank loans to Latin America are lower than they were in 1998 prior to Brazil's devaluation. However, it is clear that Argentina - the biggest issuer of bonds - is also the biggest bank borrower. Mexican demand for international bank loans has declined steadily whereas Brazil's appetite for loans has increased recently.
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