ABSTRACT
This chapter examines the growth in debt and the form and meaning, both to debtors and creditors, of the term 'debt crisis'. It explains the vulnerability of the international banking system to this crisis it will be necessary to examine the evolution and workings of the Eurocurrency market, including the inter-bank mark, and the lending strategies of the banks. The chapter outlines the steps which have been taken by various national and international actors to ward off a banking crisis and will end with a review of how the debt burden of the Third World might evolve to 1990 according to International Monetary Fund projections. In lending to Third World countries, individual banks have sought to minimize their risk by participating in loan syndicates. The inability of debtors to meet their debt-servicing commitments first surfaces in the form of growing arrears of principal and/or interest payments, and in the form of requests to renegotiate payments obligations.
