Brady Plan
E400621
The Brady Plan was a late-1980s international debt-restructuring initiative that converted developing countries’ bank loans into tradable bonds to resolve the Latin American debt crisis.
All labels observed (1)
| Label | Occurrences |
|---|---|
| Brady Plan canonical | 7 |
Statements (64)
| Predicate | Object |
|---|---|
| instanceOf |
international financial initiative
ⓘ
sovereign debt restructuring program ⓘ |
| addressesProblem |
1980s developing-country debt overhang
ⓘ
Latin American debt crisis ⓘ |
| announcedInYear | 1989 ⓘ |
| appliesTo |
Latin American countries
ⓘ
developing countries ⓘ sovereign external bank debt ⓘ |
| coordinatedWith | Paris Club debt treatments ⓘ |
| countryOfOrigin |
United States of America
ⓘ
surface form:
United States
|
| developedInPeriod | late 1980s ⓘ |
| field |
international finance
ⓘ
sovereign debt management ⓘ |
| firstMajorImplementationCountry | Mexico ⓘ |
| firstMajorImplementationYear | 1990 ⓘ |
| historicalContext |
collapse of voluntary bank lending to Latin America
ⓘ
global rise in interest rates in early 1980s ⓘ post-1982 Mexican debt crisis ⓘ |
| implementedInCountry |
Argentina
ⓘ
Brazil ⓘ Bulgaria ⓘ Costa Rica ⓘ Ecuador ⓘ Jordan ⓘ Mexico ⓘ Morocco ⓘ Nigeria ⓘ Peru ⓘ Philippines ⓘ Poland ⓘ Uruguay ⓘ Venezuela ⓘ |
| implementedThrough |
exchange of syndicated bank loans for bonds
ⓘ
voluntary participation by commercial banks ⓘ |
| influencedLater | subsequent sovereign debt restructuring frameworks ⓘ |
| introducedInstrument | Brady bonds ⓘ |
| keyMechanism |
conversion of bank loans into tradable bonds
ⓘ
debt and debt-service reduction ⓘ menu of restructuring options for creditor banks ⓘ use of collateralized bonds ⓘ |
| namedAfter | Nicholas F. Brady NERFINISHED ⓘ |
| negotiatedBetween | debtor governments and commercial bank creditor committees ⓘ |
| policyShiftFrom | case-by-case rescheduling without principal reduction ⓘ |
| policyShiftTo | market-based debt and debt-service reduction ⓘ |
| positionHeldByProposer |
Secretary of the Treasury
ⓘ
surface form:
United States Secretary of the Treasury
|
| primaryGoal |
reduce commercial bank debt burdens of developing countries
ⓘ
resolve the Latin American debt crisis ⓘ restore access to international capital markets for debtor countries ⓘ |
| proposedBy | Nicholas F. Brady NERFINISHED ⓘ |
| region | Latin America ⓘ |
| requires |
IMF-supported adjustment programs
ⓘ
World Bank structural adjustment lending ⓘ macroeconomic reform programs in debtor countries ⓘ |
| resultedIn |
creation of a liquid secondary market for emerging market debt
ⓘ
improved debt sustainability for participating countries ⓘ increased role of bond financing in emerging markets ⓘ reduction of commercial bank exposure to sovereign debt ⓘ |
| supportedBy |
International Monetary Fund
ⓘ
United States Department of the Treasury ⓘ
surface form:
United States Treasury
World Bank ⓘ major commercial banks ⓘ |
| usesCollateral |
U.S. Treasury securities
ⓘ
surface form:
U.S. Treasury zero-coupon bonds
high-grade securities as collateral for principal ⓘ rolling interest guarantees ⓘ |
Referenced by (7)
Full triples — surface form annotated when it differs from this entity's canonical label.