The 1980s Crisis in Syndicated Bank Lending to Sovereigns and the Sequence of Mechanisms to Fix It

This paper looks back to the 1980s and at how the international community addressed the debt crises of countries that were primarily indebted to international commercial banks. It describes how the initial policy, which emphasized concerted refinancing of obligations as they fell due, was superseded in 1985 by the ‘Baker Plan’, which sought multi-year relief packages and focused on fifteen countries in which the major banks had large exposures.