What role did global banks play in generating the debt crisis?
A) They refused to make loans to Latin America
B) They did not have funds to make new loans.
C) They made loans to Latin America because they figured governments can't go bankrupt
D) They could not charge high enough interest rates to make a profit.

Question

Quizplus · Accepted Answer

Global banks played a significant role in generating the debt crisis by making loans to Latin American countries under the assumption that governments cannot go bankrupt. This led to excessive borrowing and contributed to the debt crisis when these countries were unable to repay their loans.

What Role Did Global Banks Play in Generating the Debt