The collapse in oil prices over the last several months has put Venezuela in a dire situation, increasing the likelihood of a severe economic meltdown over the coming months. While Venezuela’s economy has steadily deteriorated over the last two years,…
Default Redux: Argentina Fails to Reach Agreement with Holdout Creditors
Argentina’s thirty day grace period to pay holdout creditors in full and make a scheduled interest payment to restructured bondholders expired on Wednesday (July 30). Argentina was negotiating with holdout creditors through a court-appointed mediator, but ultimately no agreement was…
Adverse US Supreme Court Ruling Undermines Argentina’s Ability to Return to Capital Markets
What happened, in brief? Argentina has recently taken strides toward making amends with international lenders, including the IMF and the Paris Club. Such efforts were motivated in large part by the government’s desire to regain access to international capital markets;…
Do You Know Which Emerging Market Is At Risk Of A Liquidity Crisis?
The economy of Ukraine is in serious trouble. To provide some context, Standard & Poor’s recently downgraded the quality of Ukraine’s debt to the same level as Greece. With a current account deficit of about 8 percent of GDP, Ukraine’s…
Germany Structuring Path to Euro Exit for Italy, Greece
German Chancellor Angela Merkel’s party voted today to provide a means for Euro-zone markets to voluntarily exit the Euro without losing access to the EU’s free trade zone. This move confirms that Germany is not willing to save the Euro…
Shadow Banking in China - Implications of Defaults
While informal lending is significant, it is not big enough to bring down the entire system. Trends: Informal lending, or shadow banking, has become very active across China since earlier this year It has recently caught both media and government…