Copyright (c) 1998 Fordham University School of Law
Fordham International Law Journal
ARTICLE: THE FACILITATION OF THE BRADY PLAN: EMERGING MARKETS DEBT TRADING FROM 1989 TO 1993
21 Fordham Int'l L.J. 1802
Ross P. Buckley *
The modern secondary market in the debt of less developed countries ("LDCs"), now known as the emerging market, grew out of the debt crisis of 1982. The first six years of the market's development were considered in an earlier Article, 1 which analyzed the evolution of the market in the following periods: (i) Birth: 1982 to May 1985; (ii) Infancy: May 1985 to May 1987; and (iii) Childhood: May 1987 to March 1989. The Article concluded that the market's principal effects were to force a degree of realism upon a bank's loan loss provisions, to provide an exit from LDC lending for certain banks, and to facilitate a range of debt exchanges including debt-equity swaps and debt buy-backs.
This Article completes the analysis of the first decade of the market's operation by considering two further periods: (iv) Adolescence: March 1989 to October 1991; and (v) Young Adulthood: October 1991 to December 1993. 2 The primary importance of the market in these periods, as will be discovered, lies in its promotion and faciliation of the Brady Plan.
I. THE TUMULTUOUS YEARS OF ADOLESCENCE: MARCH 1989 TO OCTOBER 1991
A. The Period's Major Events
The period between 1989 and 1991 began with increasing political tensions in Latin America. In early March 1989, the staid and sober pages of the Wall Street Journal rung with the warning that "while the Bush administration searches for a new U.S. policy on Third World debt, the red ink is turning to blood." 3 The ...
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