This slim volume is a timely retrospective on the Brady Plan, the 1989 initiative named after Treasury Secretary Nicholas Brady, through which the United States helped resolve the Latin American debt crisis. Under Brady’s plan, Latin American governments could exchange troubled bank loans for newly issued bonds. The United States applied regulatory and political pressure and multilateral institutions provided modest incentives known as financial sweeteners to encourage banks and governments to participate in the exchange. The arrangement cleared away defaulted loans, jump-started trading in emerging market debt securities, and renewed developing countries’ access to global financial markets. The authors caution that this strategy…
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