Less risk ldcs are more likely to expropriate

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less risk: LDCs are more likely to expropriate (nationalize) an industry, developed countries are more economically and politically stable, *Institutions -Bank for International Settlements (BIS) one of the oldest international financial organizations created in 1930, its members include the world’s principal central banks, and under its auspices they attempt to cooperate in the financial realm. initially to oversee Germany and its creditors by 1940 people saw its benefits -International Monetary Fund (IMF) a major international economic institution that was established in 1944 to manage international monetary relations and that has gradually reoriented itself to focus on the international financial system, especially debt and currency crises. created at Bretton Woods to manage the international monetary system today’s main concern is developing nations or helping developed nations in crisis -World Bank -Bilateral Investment Treaty (BIT) A set of provisions in private investment between two bargaining countries to protect the interests of both countries. *Recent Borrowing and Debt Crises -Mexico 1982 default self-reinforcing lenders worried that they would not be repaid so they stopped lending mexico had no income so it stopped making payments to its creditors the less the banks lent the more they ran out of money plunged all of Latin America into economic distress not fully resolved until 1990 -East Asia 1997 to 1998 thailand’s debt tripled
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  • Fall '09
  • Debt, International Monetary Fund

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