Banks, Borrowers, and the Establishment: A Revisionist Account of the International Debt Crisis

This account of the international debt crisis argues that private banks must continue to play a role in lending to Eastern European and Third World countries. Based on research and on interviews with cabinet members, bank CEOs, Federal Reserve governors, bank examiners and others, the book offers an explanation of why neither the banks' own internal controls nor government bank regulators succeeded in restraining the lending, and of how hidden tax subsidies by the US Government as well as by other industrialized countries made loans to developing countries unrealistically profitable and, in the long run, fragile. The author concludes that, if the hard lessons of the last two decades are taken to heart, then a healthy relationship between banks and developing-country borrowers can emerge from the rubble of the international debt crisis.