Politics, International Banking, and the Debt Crisis of 1982

Altamura, Carlo Edoardo; Zendejas, Juan Flores

doi:10.1017/s0007680520000653

Cited by 9 publications

(8 citation statements)

References 23 publications

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“…intervention of authorities forced Mosquera to act on his own. Furthermore, the headquarters of foreign banks overlent to Latin American governments during the 1970s, partially because they expected their home governments or the IMF to bailout their borrowers in the event of a macroeconomic crisis (Devlin, 1989;Altamura & Zendejas, 2020).…”

Section: Explaining Heterogeneous Performancementioning

confidence: 99%

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Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s

2022

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Section: Explaining Heterogeneous Performancementioning

confidence: 99%

“…Furthermore, the headquarters of foreign banks lent recklessly to Latin American governments during the 1970s (Devlin, 1989;Marichal, 2013, pp. 179-224;Altamura & Zendejas, 2020). The literature on rogue trading at multinational banks provides another case in point (Schenk, 2017).…”

Section: Introductionmentioning

confidence: 99%

Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s

2022

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“…The first two parties can communicate with one another only through “furtive signs” (Goffman 1971: 339). Regulators have been found to engage in communication that is “cryptic” to the public (Altamura and Zendejas 2020:768) but can be decoded by market participants. Yet there are limits to how differently one message can be understood.…”

Section: Crises In the Frontstage/backstage Frameworkmentioning

confidence: 99%

Caught between Frontstage and Backstage: The Failure of the Federal Reserve to Halt Rule Evasion in the Financial Crisis of 1974

Fink

2022

Am Sociol Rev

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Rule evasion by companies is a major driver of change in contemporary market societies. Recent research holds that periods of market instability offer opportunities to bring rule evasion under control because crises expose hidden market practices. Based on original archival evidence from the financial crisis of 1974, this article shows that rule evasion is disclosed not automatically, but strategically and selectively. To explain the ensuing dynamics, the article develops a Goffmanian framework in which regulators learn of a crisis of rule evasion backstage (in their interactions with companies) but use a conventional definition of the situation frontstage (in their presentations to the public). In an as yet unrecognized outcome, the regulators may find themselves caught between frontstage and backstage: their communications to the public limit their room for maneuver against the companies backstage, forcing them to repurpose their extant crisis-management tools. Because regulators publicly pretend to stay within their mandate, this form of crisis response renders re-regulation of rule evasion less likely. The finding contributes a new explanation for a central puzzle in the burgeoning sociology of crises: why periods of instability so rarely lead to change.

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“…They recognized that it would not be practical to lay down in advance detailed rules and procedures for the provision of temporary liquidity. But they were satisfied that means are available for that purpose and will be used if and when necessary" (see Altamura and Flores Zendejas, 2020).…”

Section: The Imf As Ilolr-in-chiefmentioning

confidence: 99%

The international lender of last resort between Scylla and Charybdis

Zendejas¹,

Gaillard²

2021

Moral Hazard

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This chapter provides a historical overview of the efforts for international cooperation in pursuit of financial stability. We argue that there are two fundamental threats likely to undermine the actions of an international lender of last resort (ILOLR): debtor moral hazard and creditor moral hazard. During the Pax Britannica years, the Bank of England and the Bank of France were de facto ILOLR and managed to contain both types of moral hazard. In the interwar years, the League of Nations developed new forms of last-resort loans but failed to prevent the Great Depression because of the lack of cooperation between top capital-exporting countries. Since its establishment in 1944, the International Monetary Fund (IMF) has granted various credit facilities conditioned on the recipient countries accepting macroeconomic stabilization. The financial globalization process that started in the 1980s has exacerbated creditor moral hazard. This issue, largely overlooked by the IMF, should be a major source of concern for policy makers.

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Politics, International Banking, and the Debt Crisis of 1982

Cited by 9 publications

References 23 publications

Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s

Tunneling when Regulation is Lax: The Colombian Banking Crisis of the 1980s

Caught between Frontstage and Backstage: The Failure of the Federal Reserve to Halt Rule Evasion in the Financial Crisis of 1974

The international lender of last resort between Scylla and Charybdis

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